From lower bills to better weather, many people are looking beyond the UK and choosing to retire abroad, but there are risks to look out for.
The number of Britons looking to retire abroad is “rapidly growing”, said Sky News, but there are hurdles before they can fulfil their dream of a life “in the sun”, especially since Brexit.
Due to a range of factors there is a “massive gap”, said Aegon, between the life people imagine in retirement and where they eventually choose to live.
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Why are people retiring abroad?
An estimated 200,000 to 250,000 British retirees currently live overseas, said PensionBee, with many possibly swayed by “warmer weather, a change of lifestyle or a more affordable way of living”.
In some cases, older people are looking further afield in places such as Thailand for care homes, due to “higher standards and lower costs”, said The Times.
Popular places to retire to
France, Spain and Australia have historically been “prime candidates” for expat Brits to retire to, said Hoxton Wealth, but a “new roster of destinations” is becoming more popular due to cost of living rises, visa rule changes post-Brexit and changing tax landscapes.
Cyprus is popular among retirees, said MoneyWeek, due to the lack of inheritance or wealth taxes in place, “as well as its climate and outdoor lifestyle”, plus English is widely spoken across the country. The Republic of Ireland is also popular as “under the Common Travel Area (CTA), UK citizens have the right to live, work and retire” there without the need for a visa and there’s no formal application process for residency, “unlike a host of other EU countries post-Brexit”.
Malta and Portugal also rank high among retirees, added the financial website, thanks to their proximity to the UK as well as “balmy climates, access to healthcare and low crime levels.”
What to consider when retiring abroad
One of the biggest factors to consider when retiring abroad is your state pension.
Expats are denied the “triple lock uplift” on state pensions, said The Telegraph, if they live in around 100 countries including much of the European Union, Canada, Australia and New Zealand.
This means state pension payments are frozen at the rate first received and the financial impact can be “increasingly severe”, said Rathbones, meaning people miss out on around £77,000 over 20 years.
Depending on where you take money from, you need to consider “inevitable fluctuations” in exchange rates, said Experts for Expats, as you need to be sure your income will continue to support you, even if your disposable income drops. The “default position”, may be to sell your home and move abroad, but consider whether you may decide to return to the UK and how hard and expensive it may be to get back onto the property ladder.
It is worth testing out an area first either by renting or just having a holiday, said Aegon, and working out what stage of retirement it is best for. This way you can find out what daily life actually feels like “before you redesign it entirely”.
