European state pensions paid in UK

Alisonjane1 · 3 January 2018 at 1:34PM

Hi there. Does anyone know how European state pensions are paid to accoutns in the UK. I worked in France and Belgium for several years and will get small pensions from both countries. What I can't seem to find out is if I will have to pay transfer fees on receipt of these pensions. My own bank (TSB) has told me a fee is payable every time an electronic transfer is paid into a UK account (£2 for a payment under £100 and £7 for a payment of more than £100).
I was told by UK pension authorities in Newcastle that when UK pensions are paid in France etc there is no transfer fee.
Can anyone enlighten me? Are there other banks that do not charge or who charge less? I cannot be the only person in this position.
Thanks in advance for your help.

steampowered · 3 January 2018 at 2:15PM

I imagine these fees will be due to the currency conversion.

A lot of the banks charge for converting foreign currency into pounds when you receive the payment. And you get hit twice because the banks may also give you a poor exchange rate.

You could consider opening a Euro account. You can do this in the UK - plenty of the high street banks will let you have a UK account in a foreign currency.

You could then use a specialist transfer service (like transferwise or hifx) to convert the money into pounds at a lower fee and better exchange rate. This also gives you control over when to do the transfer - e.g. you could change the money into pounds once every 6 months rather than once a month to save on fees.

JezR · 3 January 2018 at 4:37PM

With UK pensions paid overseas they are in general paid in the currency of the country, by whomever has the contract to administer the payments at the time (has been RBS and Citibank). You would need to check with the French and Belgian authorities as to their practice.

As to an account in euros, as another option Revolut will set one up which can receive third party payments, which you can then convert to sterling through the app when you like.

Alisonjane1 · 3 January 2018 at 5:47PM

Thanks for replying. I am waiting for an answer from the Belgian authorities to see which bank/body they use but I had the impression that TSB would still charge me even if the money arrived in sterling, which I don't really understand!

woolly_wombat · 3 January 2018 at 6:28PM

If you have lived and worked in several different EU countries then you need to apply to the pension authority in the country where you are now living. Lots of details here, including the different retirement ages applicable to various EU states etc:
https://europa.eu/youreurope/citizens/work/retire-abroad/state-pensions-abroad/index_en.htm

In the case of the UK you need to contact the International Pension Centre in Newcastle. They should coordinate all the payments so I don't understand why a transfer fee would be due. Contact details here:
https://europa.eu/youreurope/citizens/national-contact-points/united-kingdom/index_en.htm?topic=work&contacts=id-611493

Are you claiming in the next few months, i.e. before the March 2019 Brexit deadline?

Alisonjane1 · 4 January 2018 at 9:14AM

Hi Woolly Wombat. I have all the forms from Newcastle. I want to apply for my Belgian pension now as am elgiible for it in May. France will be next year. Hoping to get in before the Brexit deadline as again no-one can tell me whether this will affect me or not.
The fees mentioned seem to be levied by the bank receiving the payments, because they will be coming from a foreign bank. I find it hard to believe that there is not another way. I wonder if this applies also to UK citizens living in mainland Europe, and if not why the same system cannot be used the other way round.
Can anyone else shed any light on this?

greenglide · 4 January 2018 at 12:02PM

I wonder if this applies also to UK citizens living in mainland Europe, and if not why the same system cannot be used the other way round

UK state pensions used to be paid by Citibank and I assume they still have the contract.

DWP pays the sterling amount to Citibank. Citibank then convert this into the currency of the country where the payment is to be made. I assume this conversion is done at the exchange rate applicable at the time and this amount is paid into the recipient's bank account. Since the is a payment in the currency of the account there should not be any extra charges. Of course the bank concerned may make charges for any payments in, other countries will not, necessarily have "free" banking as we do.

This is a commercial agreement between Citibank and DWP, "reversing" it would make no sense and would be impossible. If the overseas pension chooses to make the payment in its own currency rather than in sterling there isn't a right lot you can do as someone will have to pay for the conversion.

I had thought that state pensions accrued in EU countries were paid by DWP along with our state pension on there behalf so there would be no overseas payments?

Of course BREXIT could change this, we have no way of knowing what will happen to the reciprocal agreements that are currently in place.

colsten · 4 January 2018 at 12:25PM

greenglide wrote: »

I had thought that state pensions accrued in EU countries were paid by DWP along with our state pension on there behalf so there would be no overseas payments?

I'd be surprised if it worked like that. As far as I know, each country will pay whatever you are entitled to in that country, into an account of your choice (in that country, or in another country). The only reason for a co-ordinated processing of the application by 1 country is to establish the amounts you are eligible for, as explained in the link woolly_wombat posted earlier.

woolly_wombat · 4 January 2018 at 12:58PM

Alisonjane1 wrote: »

I want to apply for my Belgian pension now as am elgiible for it in May. France will be next year. Hoping to get in before the Brexit deadline as again no-one can tell me whether this will affect me or not.

A relative has a pension from France due for maximum payment in May 2019, i.e. post Brexit. He is currently planning to claim it a year early, which from memory would incur around a 4% reduction as allowed under the rules of his French pension, but in his case that will be more than offset by deferring his UK pension for a year.

Uncertainty over the outcome of Brexit has led to this decision.

Sorry, can't help with your original query re bank charges, but would be interested to hear the outcome.

greenglide · 4 January 2018 at 4:34PM

A relative has a pension from France due for maximum payment in May 2019, i.e. post Brexit.

Is this a pension from a French company and a French State Pension?

A pension from a French "shouldnt" be significantly impacted unless they make an even bigger mess than they have so far. State pensions are subject to reciprocal agreements which could potentially suffer.

woolly_wombat · 4 January 2018 at 4:55PM

greenglide wrote: »

Is this a pension from a French company and a French State Pension?

Yes, but for a period of only 4 years, so eligible under current rules but will it satisfy the minimum 15 years for France post Brexit?!

Not taking any chances.

European state pensions paid in UK

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