Many of us dream of retiring overseas to sunny climes, and for many, who have saved prudently, this is a very real possibility.
So where do most Brits head? Do we migrate to southern Europe seeking sun, or head further afield?
The research from Retirement Advantages, shows, perhaps unsurprisingly, that the most popular destination is Spain followed closely by American with Australia coming in third.
The top 10 destinations are as follows:
1st: Spain (19.4%)
2nd: America (15%)
3rd: Australia (7.2%)
4th: France (6.1%)
5th: Italy (5.6%)
6th: South East Europe (4.4%)
=7th: New Zealand (3.3%)
=7th: The Far East (3.3%)
8th: Portugal (3.9%)
9th: Canada (2.8%)
Andrew Tully, pension technical director at Retirement Advantage said: “We dream of year round sunshine and an easier pace of life when we retire, and a number of us are hoping to enjoy just that with plans to move abroad. Cheaper living costs and potentially cheaper property than the UK can be a strong draw, but without the right preparation, your retirement dream can quickly become a nightmare.”
“Without the right planning and financial advice, you can quickly find yourself caught out by local tax laws, currency exchange rates and other financial arrangements.”
The research also revealed that the decision to leave the EU has cause potentially thousands of people to rethink their retirement plans.
Some 62% of people say they are less likely to move overseas in retirement. The effect of Brexit is particularly marked amongst those people aged over 55, who can take their pension now and head off overseas if they wish, with 84% now saying they are less likely to retire overseas.
However, 38% of people say that Brexit actually increases the chances of them retiring overseas.
Andrew Tully again: “Our decision to leave the EU has split opinion, but the political and economic uncertainty post Brexit is making people nervous. This could simply be down to the unknown, as we clearly don’t know longer term how Brexit will affect UK citizens already living overseas. But we do know the immediate fall in sterling against the dollar and euro has made it more expensive to live abroad if you are converting an income from the pound.”
“Currently if you retire to live in the EU your UK state pension is protected by what is called a ‘reciprocal arrangement’. What this basically means is any increases to your state pension are protected and paid in line with retirees living in the UK. When we exit the EU these arrangements will form part of the negotiations, and although we don’t know how they will be treated, it’s worth considering how your retirement finances will keep up with the cost of living.”
“To help navigate the complexities of retiring abroad, it is vital people seek professional financial advice. There are a number of firms who specialise in providing advice to budding expats, which could make the world of difference between the retirement of your dreams or an altogether more challenging experience.”
We are here to help
If you are planning to retire over the coming few years, independent financial advice can help you make the right decisions whilst taking advantage of the new pension rules.
We are here to help; call Bev or Sarah on 0115 933 8433 or email firstname.lastname@example.org