A no-deal Brexit would impact both on Scotland’s pension and insurance sectors, the UK Government has admitted.
Ex-pats living in other European Union - EU countries could lose access to their pensions and bank accounts if the UK leaves the EU with no deal.
The admission from the UK government is causing worry to Scots pensioners and others living in the 27 remaining EU member states. It is also a headache for Scotland’s strong life and pensions sector.
Annuities, lending and insurance are among the financial products that Britons, living in the 27 EU and other European Economic Area countries such as Norway, will not be able to access unless the EU agrees before the deadline for departure.
The warning, which would impact from the very first day of the UK leaving without a deal, comes among the “technical notes” which the UK Government issued yesterday.
It follows the other advice – as reported on insider.co.uk on 23 August – that UK citizens will have to pay more to make credit card payments in the EU, in effect an additional tax which could total £166 million annually.
Hugh Savill, director of regulation at the Association of British Insurers, warned that the UK leaving the EU without a deal would cause “major inconvenience” to millions of pensioners, travellers and drivers.
Patricia Gibson MP said:
“The technical notes confirm what pensions and insurance companies have long known; that without a deal to ensure cooperation between the UK Government and the EU post-Brexit there is a strong risk that existing payments from UK companies to those living in the EU could be disrupted or even made impossible.”
Companies such as Royal London and the Royal Bank of Scotland are looking at ways of dealing with this, including setting up a subsidiary within the remaining EU.
Liz Cameron, Chief Executive, Scottish Chambers of Commerce added:
"The impact of this highlights the need for a constructive deal to be reached, but continued uncertainty around this area has already caused several firms to press ahead with contingency plans, by opening additional subsidiaries or moving staff."