How does the 2026 UK/EU Treaty in relation to Gibraltar change who pays pensions for frontier workers?
Short answer
Under the 2026 UK/EU Treaty in relation to Gibraltar, Spain and Gibraltar now share responsibility for pensions where a worker has insurance periods in both systems. Instead of Gibraltar bearing the full cost, each side pays a proportion based on time contributed under its legislation. This significantly reduces Gibraltar’s financial exposure for Spanish frontier workers with mixed careers.
Detailed answer
The Protocol on Social Security Coordination in Annex 31 introduces aggregation and pro rata calculation rules. Where a worker has completed periods under both Spanish and Gibraltar legislation, each competent institution calculates a theoretical pension and then pays a proportion reflecting the periods completed under its own system. This replaces the previous situation in which Gibraltar’s social insurance fund effectively carried the full pension burden for many frontier workers who had also worked in Spain. By apportioning liability, the treaty creates a structured cost-sharing framework between the two jurisdictions.