Post-Brexit costs for retired people
As the dust begins to settle, the impact of a Brexit starts to become clearer. There will undoubtedly be administrative headaches for British expats in France, like identity cards, driving licences, possible visas, etc. But aside from those, I've been trying to bring together the main areas where living in France could become tougher in terms of cost. This is with a particular focus on pensioners, who may not have the ability - physical or mental - to raise more income.
1) The obvious one is the loss of value of the pound against the euro which, if it stays as it is currently, will be the equivalent of a 10% drop in UK-sourced pensions.
2) Holders of an S1 under EU rules pay minimal Social Charges on their pensions. The full 15½% would be payable once post-Brexit Britain no longer issues S1 forms.
3) If the UK withdraws reciprocal healthcare arrangements, and France offers access to the CMU (to use its familiar name), the cost will be 8% of income above €10.000 p.a..
4) British state pensions paid in EU countries could lose their inflation link. This wouldn't cost much at current inflation rates, but would add up once a few years had passed.
An example should make the impact of the above clearer. A couple without dependants (and no income from investments) whose joint pensions total €50.000 per annum currently pay around €4.500 in French tax, leaving a net income of €45.500. If none of 1) to 3) above is relieved in some way through negotiation between Britain and France, their net income will be reduced by nearly €15.000 a year, leaving them around €30.800 per annum to live on instead of €45.500. That's a drop of a third in spending power.
It's a worrying time for all, and particularly the elderly. Some or all of the above additional costs can be avoided if the exchange rate improves, or the British and French governments agree sensible measures to protect British expats resident in France pre-Brexit. However whether that will happen remains to be seen. In the meantime, if any TAG readers disagree with, or can add to the observations above, please can they say so that we can bring together the best intelligence possible with which to monitor things as they develop.
xC
