Expat retirees living in Europe will only be able to rely on annual increases to their state pension for three more years post Brexit, the government has announced.

Under current rules, British pensioners in the EU get annual increases to their state pension income in line with pensioners living in the UK. This is different to those living in countries like Australia, Canada and South Africa whose ate pension does not rise.

However, the Department for Work and Pensions has announced those annual increases will only be guaranteed for the next three years, at which point the government ‘plans to negotiate a new agreement’.

Steve Webb, director of policy at Royal London said if the DWP was trying to reassure pensioners, its announcement would have had ‘the opposite effect’ and claimed time-limited guarantee would be deeply worrying to British expats living in the EU.

He said that if the UK were to leave the EU on bad terms, there was no guarantee that a new uprating arrangement would be reached, so pensioners have no assurance that annual increases will continue after that.