At a time of their lives when they hoped life would be tranquil, many of our clients find themselves in the unenviable position of having to make sense of the pensions they acquired when working in different parts of Europe long before Brexit was a bad idea that turned into an even worse reality.
The situation is summed up in a question our Financial Advisor, Simon, was asked this week.
“I have worked a full career in Europe spanning 40 years in total. This was spread across France, Spain and the UK and I contributed to the state pension systems in these countries. What entitlement will I have to any state benefits when I retire later in France?”
The answer is not all bad.
The EU has a process for retirees who have worked in different parts of Europe and fortunately the UK is still included in that arrangement.
In short, it is the job of the social security in the country where you last worked to organise your total state pension benefits available from the previous EU countries involved.
This is done on a time apportioned basis. Each country where you worked will have to pro-rata the pension payment due from them as a proportion of your total time worked in Europe.
Far from being bad news, this could have clear benefits if you worked in countries that stipulate a minimum number of years of working before being entitled to a state pension.
Let’s take as an example a country where you needed to work for ten years to be entitled to a pension, but you only worked 4. In this scenario, the country in question would have to accept that you worked for 40 years in total within Europe, therefore you exceeded the 10 years minimum required and as a result they would have to pay pro-rata for their four years due.
It’s worth noting that different countries have different retirement ages, so not all the pensions may become immediately available from the selected date of your retirement. In that case, you would have to wait for the normal state retirement date from these countries before receiving any payment for this proportion of your retirement income.
If you have other questions about retiring in Europe, and more particularly France, you can schedule a FREE 15min call with Simon, our financial advisor, by clicking on the button below.