SHARE
COPY LINK

BREXIT

UK makes pension and healthcare pledge for British expats post-Brexit

The UK Prime Minister Theresa May laid out the country's post-Brexit offer to EU nationals living in the UK on Monday, but also made some key pledges that may ease the worries of the tens of thousands of British expats in Spain.

UK makes pension and healthcare pledge for British expats post-Brexit
Photo: AFP

In a speech to the British parliament on Monday, May laid out the UK’s offer to EU nationals living in the country after Brexit.

She also made key pledges on pensions and health that will be of interest to British nationals living in Spain and other EU countries.

May said the British government will continue uprating pensions, meaning they will not be frozen as they are for elderly British nationals living in countries like Canada and Australia.

The Conservative prime minister, who has been under fire ever since her party’s near-disastrous election result earlier this month, also vowed that payment of disability benefits and health cover would continue for Brits in the EU after Brexit.

“The UK will continue to export and uprate the UK state pension and provide associated healthcare cover within the EU,” May told parliament.

“We will continue to protect the export of other benefits and associated healthcare cover where the individual is in receipt of those benefits on the cut-off date,” she added.

That cut-off date has not yet been set but will be some point between the triggering of Article 50 on March 29th this year, which officially signalled the UK’s intention to leave the EU and March 29th 2019.

Theresa May also said the UK intended to continue to be a part of the European Health Insurance Card Scheme, so Brits who travel to Spain and other EU countries can continue to the health costs covered.

For longer-term residents it would mean continuing with a system whereby each country reimburses the other for the healthcare costs incurred by their citizens.

The issues of health and pensions have high on the list of Brexit worries for British nationals ever since the UK voted to leave the EU in June last year.

The bulk of May’s speech on Monday laid out the UK’s offer to EU nationals living in the UK.

All EU nationals who have five years’ continuous residence in the UK will be eligible to apply for “settled status”.

READ ALSO: 

For members

BREXIT

BREXIT: Premium Bond holders in Spain may have to cash in if no UK bank account

British residents of Spain have flagged up the latest Brexit consequence that could affect not just them, but also UK nationals living in other EU countries. Holders of Premium Bonds have been warned they may have to cash in their investments if they can no longer hold a bank account in their home country. 

BREXIT: Premium Bond holders in Spain may have to cash in if no UK bank account

The news has been shared on Facebook groups by people affected, after they were sent a letter from the state-owned UK savings bank NS&I (National Savings & Investments) warning them that a UK bank or building society account is an essential requirement for holders of their products. 

Premium Bonds are a type of lottery run by NS&I. Britons or UK residents can invest an amount ranging from £25 to £50,000 (€29 to €58,300+) in the bonds, with a number assigned to each pound invested.

Winning numbers are drawn each month awarding tax-free prizes. The amount invested is completely safe. As much as £1 million is on offer in the monthly draws, with the lowest prize coming in at £25.

NS&I also offers a range of other investment products, such as Income Bonds – which pay regular interest to holders – and Direct ISAs, which are a tax-free savings account. 

According to NS&I, which was responding to questions from The Local, all of their products are affected by this change.

The reason for the warning to customers is the fact that some UK banks have been closing the accounts of their customers based in the EU, given that these lenders no longer have the licence necessary to maintain them after Brexit. 

Judy Filmer has lived on the Costa del Sol for 21 years, and is among the NS&I customers to receive the letter, as did her 95-year old mother, who is also a resident of Spain.

“For many older folks this will be another upheaval to negotiate in the storm left by Brexit,” she told The Local.

“NS&I and Premium Bonds are cosy ways of saving, and pensioners find them easy to use.”

Lloyds Bank, Barclays and Coutts are among the lenders who have been closing accounts of their UK customers resident in the EU.

Other banks, however, including HSBC, Santander and NatWest, are currently taking no such action for clients that fall into this category. 

The letter sent earlier this year by NS&I stated that “some banks and building societies in the UK have told their customers living in certain EU countries that they will no longer be permitted to hold their UK-based accounts” since the Brexit transition.

“As you live in one of those countries,” the missive continues, “we realise that this could affect your ability to continue holding your NS&I Premium Bonds and Income Bonds account(s). This is because you need to have a UK bank or building society account to continue to operate an account with NS&I.”

The communication from NS&I goes on to warn holders of its products that they will have to provide details of another UK account held, or if “you don’t have access to another UK account in your name, you will need to close your NS&I account.” 

Speaking to The Local, NS&I clarified that “it would be impractical and against NS&I’s Customer Agreement (terms and conditions) for [these customers] to continue holding NS&I products. NS&I’s Customer Agreement requires customers to keep a UK bank or building society account open in order to operate its accounts.”

However, all is not lost. NS&I confirmed to The Local that “any UK bank or building society account that can receive BACS payments” will be accepted for holders of its products living in the EU. 

premium bonds

HSBC, Santander, NatWest and other banks are currently taking no action against clients abroad regarding Premium Bonds. (Photo by ADRIAN DENNIS / AFP)

London-based financial technology company Wise (formerly TransferWise) does offer such an account.

“British nationals living in the EU can open a Wise Account to get their own personal UK account details, which supports payments made by BACS transfer,” the firm told The Local. “This means UK citizens living in the EU can get a personal UK account number with the Wise Account.”

In practice this means that anyone who holds NS&I products, and is facing having their UK account closed by their lender due to Brexit, can open a substitute account with Wise or a similar firm that supports BACS payments and accepts UK nationals resident in the EU as customers. 

Providing, of course, no more ‘Brexit benefits’ arrive…

Breakout box: Tax on Premium Bonds

While winnings from Premium Bonds are tax free in the United Kingdom, it’s a different story if you are living in Spain.

The Local spoke to Spain-based financial adviser Chris Burke, who explained that the rules of each individual country determine whether tax is due on prizes from the product.

“In Spain, each year you must declare any monies received from these whether you access this or not, and pay the tax liable,” he explained.

“This would be savings/capital gains tax starting from 19 percent [for amounts up to €6,000] and rising up to 26 percent [for anything over €200,001].”

So be warned: while you might take home a tidy million pounds in the UK if your Premium Bonds number comes up, in Spain you’ll have to share it out with the Tax Agency.

SHOW COMMENTS