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What impact will Brexit have on our UK pension payments”

09/11/2019 Posted by IAPF | Comments(0)

Q Having lived in Liverpool for the best part of 30 years, my wife and I both retired this year and we decided to move to our holiday home in Galway. However, we have been growing increasingly concerned about what impact Brexit could have on our pension payments from the UK. I always just assumed it would not have any impact, but I've been told recently that it could. Can you shed any light on this?

A Like most things Brexit-related, this issue is something that remains unclear for the moment.

What you are referring to is an issue that has been raised around UK insurers, which may no longer be legally allowed to pay pensions to retired employees living overseas in the EU, according to the CEO of the Irish Association of Pension Funds (IAPF), Jerry Moriarty.

The concern relates to particular wordings in some UK contracts where a pension is being paid by an insurance company.

It is not clear what way your pension is currently structured, such as from where the funds are coming.

But if your ex-employer is the one paying your pension, then you may not have any issues, Mr Moriarty said.

His advice is to speak directly with your pension provider to see if it can give you some clarity on where you stand. Ultimately, you are still legally entitled to these monies.

Q I have had a pension for the past 20 years. I am 57 now and still in full-time employment in the same job. About three years ago, I had a full review of my pension plan, and was advised that much of my pension portfolio was exposed to the UK stock market. With a no-deal Brexit on the horizon, how concerned do I need to be about sterling fluctuating?

A Brexit is likely to have an impact on Irish pensions in several ways, particularly on Irish people who are in receipt of a British private pension from a UK insurer. Your concern relates more to currency exposure, which Irish pension investments may well be affected by in a wider sense, in the event of sterling fluctuations following Brexit. Exposure to currency market fluctuations is always a risk when investing through a different currency, and currency risk management is its own distinct and important area of investment strategy, according to Mr Moriarty. If you have a lot of exposure to UK investments in your portfolio, then it would be prudent to get up-to-date financial advice on the best steps to take to protect your fund in this regard, Mr Moriarty said.

It is also quite possible that the investment profile has changed or that it may be hedged against currency fluctuations.

In general terms, the golden rule of investment is diversification. Never invest too much in a single company, industry, country, currency or type of asset. Concentrated investment positions can produce spectacular returns if they go well or disastrous ones if they go badly, he said.


If you are worried about the impact of Brexit on your pension payments coming from Britain, the advice is to speak directly to your provider.


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