Planning to get away from it all when you retire? Find out where people plan to retire to in 2016 – and how things have changed since 2013.
Between 2013 and 2016, there has been a 2.1% increase in people intending to retire outside of the UK. Among these, there has been a 1.1% increase in the number of people planning to move to Europe, while 1.1% fewer people plan to move outside of Europe.
Among European countries, only Spain saw a significant year-on-year increase in the percentage of people planning to move there, at 6.1%. France and Central Europe saw the biggest declines, at -2.7% each.
Outside of Europe, America, saw the biggest year-on-year increase in the percentage of people planning to move there, at 7.4%. The Far East saw the biggest decline, at -3.2%
Top tips for retiring abroad
- Make sure you've got enough saved into your pension to cover your new life abroad. Find out more about drawing a pension abroad here.
- Seek independent financial advice before making any firm plans. It's vital to have a solid financial foundation to live on.
- Notify HM Revenue and Customs that you are moving abroad. They will let you know if you are liable for any UK tax while living overseas. They can also allow your UK pension to be paid gross (no tax deducted), and taxed in your country of residence instead, if the country has a double taxation agreement with the UK.
- Find out if there are any reciprocal agreements in regarding your State Pension and other social security benefits in your destination country. You can find out more here.
- Check on your welfare rights abroad – you may be able to claim some or all of any benefits you claimed in the UK. Find out more here.
- Keep an eye on the exchange rate – especially if you're planning to buy a property. Just a small fluctuation in rates can make a big difference.
- Check the cost of healthcare in your destination country and make sure you can afford any ongoing medical treatment you have. You may wish to consider medical insurance.
- If you are keeping your property in the UK, let your mortgage provider and insurance company know whether you are planning to rent it out or let it remain empty.
- Check on the cost of living in the country you are moving to – is your pension enough to maintain your current lifestyle?
- Let your utility companies, bank and your local council know when you are planning to leave.
- Contact the electoral register to let them know you are leaving. You can also set up a forwarding address with the Post Office.
Brexit effect on retiring abroad
Has the EU referendum had an impact on people's retirement plans? Officially, nothing's changed yet – although the pound sterling has fallen quite dramatically since June 23rd. If you're relying on income paid in the UK and converted into euros, your money will now buy you less, and buying foreign property has also become more expensive due to the steeper exchange rate.
In the years to come, you will need to consider how your UK State Pension might be affected by any changes in reciprocal agreements between the UK and European countries. Currently, when drawing your State Pension in most EU countries, it will increase annually in line with other retirees in the UK.
We don't yet know how the exit negotiations will affect these reciprocal agreements. It's a good idea to factor a rising cost of living into your budget, and bear in mind that your pension increases may be frozen at some point in the future.
Many UK residents who have already retired in the EU have found that things have become more expensive to them, due to the fall in sterling against the euro and dollar. While any exit from the EU will take at least two years to negotiate, those currently living abroad should consider any potential changes to inheritance and tax laws as well.
GOV.UK - State Pension if you retire abroad
Government site explaining how to claim your State Pension abroad and some of the things to be aware of.
GOV.UK – Moving or retiring abroad
A short checklist of the government agencies to notify if you are planning to retire abroad.
GOV.UK – Guidance for buying property abroad
Government advice on buying a home overseas, including tips for seeking independent legal advice and getting a mortgage.
Money Advice Service – Retiring Abroad
Independent information on how your State and workplace pensions are affected by moving abroad, and what to do when you return to the UK.
Money Advice Service – Buying property overseas
Independent advice on things to consider when buying a property abroad such as exchange rates, tax considerations and local laws.
Which? Retiring Abroad
Information on pensions, tax, inheritance and healthcare when retiring abroad, from consumer group Which?.
Age UK – Retiring Abroad
Contains some practical considerations on settling down abroad as a retiree, as well as information about health, social care and benefits.
Network of websites for British expatriates, containing plenty of useful information about living abroad in many different countries.
Online currency conversions.
Numbeo – Cost of Living
A useful guide to the cost of many common items and services in cities around the world.