The government has allayed concerns it may stop increasing the state pension in line with inflation for hundreds of thousands of expats retiring to countries in the EU.
Currently, UK expats who have retired to the bloc receive the so called triple lock uprating, meaning their state pension rises in line with the highest of average earnings, inflation or 2.5 per cent.
Doubts emerged last year that expats who had retired to the bloc would stop receiving the uprating in the event of a no deal scenario after a December announcement by the Department for Exiting the European Union (DExEU).
In the policy paper, DExEU pledged only to maintain the triple lock if the EU reciprocated with its own expat citizens in the UK.
But in response to a written parliamentary question on the issue, Conservative peer Baroness Peta Buscombe said the government “will uprate the UK state pension for those living in the EU in 2019-20”.
Analysts at AJ Bell estimate it will cost the government around £400m a year to do this.
It remains unclear what would happen beyond the end of next year if, in the event of a no deal scenario, the EU refused to reciprocate the triple lock uprating.
Buscombe added: “We want to secure continued reciprocal arrangements covering the uprating of State Pensions in the EU even in the event of a ‘no deal’ exit,” seeming to refer to DExEU’s previous statement.
The UK state pension “will continue to be payable worldwide following the UK’s departure from the EU,” she said.