MPs have been told that a no-deal Brexit will mean it will become illegal to pay private pensions to retired Brits living abroad.
The Association of British Insurers has said that British pensioners living in the EU would be left cashless and tourists travelling outside of the UK would have to pay more for travel insurance without cross-EU insurance cards.
“That is a perfectly plausible risk in the future of no agreement is reached in some countries of the EU,” said the ABI’s director general, Huw Evans.
“If a claim comes in two years down the line, in a country like Germany, their lawyers will be advising them you can’t pay the claim,” he said.
“It’s important to note here to avoid panic that each country of the EU has slightly different arrangements around this,” he added. “We’re not saying this is a blanket risk across all 27 but it is a classic risk of the type that requires regulators with political blessing to sort the issue out themselves.”
Hilary Benn, the Brexit committee’s chairman, said: “They might find that they couldn’t be paid their pension – is that what you are saying?”
According to Evans, 38 million pension contracts would also be left under question due to it being illegal to pay claims in EU countries.