The British Treasury has warned that millions of current and future pensioners will be worse off if the UK leaves the European Union (EU).
The Treasury’s study, released on Thursday, suggests that leaving the EU, known as Brexit, would increase inflation, and undermine the value of state pension raises.
It added that those with an additional pension pot worth £60,000 would see its value erode by £1,900.
However, the Vote Leave campaign called the Treasury’s analysis “utterly outrageous.”
“This is an utterly outrageous attempt by the government to do down people’s pensions and is little more than a cynical attempt to distract from the government’s broken promises on immigration,” said Former Pensions Secretary Iain Duncan Smith, who is campaigning for Vote Leave.
“The biggest threat to British pensions is the European Commission’s proposals to undermine occupational pensions, which the government themselves have described as ‘damaging and reckless,’” he stated.
“Meanwhile, tax proposals from Eurozone countries will wipe billions off British assets hitting pension funds hardest,” he said.
On Monday, George Osborne, the Chancellor of the Exchequer, warned that Brexit would lead the UK into a year-long recession as well as 820,000 job losses.
The Tory Chancellor said the exit from the European Union would cause an “immediate and profound economic shock.”
Osborne said if Britain
leaves the EU, “the economy shrinks, the value of the pound falls, inflation rises, unemployment rises and wages are hit.”
Economic fallout of ‘Brexit
On Thursday, Osborne said, “Much of the [Brexit] debate so far has focused on the potential economic fallout of a vote for Leave for those now in work, in terms of the impact on their jobs.”
“But it’s important that pensioners understand what’s at stake for them too on June23,”he added.
“Pensioners who have worked hard all their lives deserve dignity, security and certainty in retirement. That’s what we all hope for and what any responsible government should seek to provide,” the Chancellor said.
Christine Lagarde, the International Monetary Fund (IMF) chief, said there were no economic positives to Britain leaving the EU and that the impact would range from “pretty bad to very, very bad.”
The Bank of England had also said earlier that Brexit could push the world’s fifth largest economy into recession.
Opinion polls have indicated that UK voters believe staying in the EU would be best for Britain’s economy, but that support for leaving and remaining still remains at a virtual tie.
The economy and the impact of a possible British exit, or Brexit, on jobs, wages and trade are a key battleground for both the “In” and “Out” campaigns before Britons vote on June 23 on whether to stay in the 28-member bloc.
The “In” campaign, those in favor of remaining in the bloc, argue that leaving it would risk the UK’s prosperity, diminish its influence over world affairs, and result in trade barriers between the UK and the EU.