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Expats’ Main Financial Concerns Revealed

We always invite our readers to get in touch with us – whether they have a story they’d like us to research, or whether they have an offshore financial solution that they’re seeking.  No two enquiries received are ever the same, which got us thinking and wondering about what concerns are uppermost in an expat’s mind when it comes to money matters.

We already know that our readers come from many nations, many different backgrounds and cover the working-age-to-retirement-age spectrum, so we were intrigued to discover whether expats in general share financial concerns.  As a result, we have surveyed our readers and been able to draw some fascinating conclusions.

Over the past two months we’ve been getting back in touch with some of those who have completed our enquiry form over the past year, and asking what financial concerns are uppermost in their minds relating to their short and long-term future perspectives.  It seems that expats share the same financial worries as their onshore counterparts…but expats are in a better position to protect themselves from long-term money problems.

A recent survey conducted by LoveMoney.com of their readers revealed that 67% had concerns directly relating to their retirement/long-term care, and this ties in absolutely with our own findings relating to our expatriate readership.

We surveyed 250 readers who originally contacted us with a financial related enquiry, and the response rate was high: of those questioned, 217 replied with useable answers to the two questions we posed which where: –

What concerns you most about your current/short-term financial position and why?
What is your biggest concern relating to your long-term financial position and why?

76% of our respondents voiced similar concerns to those highlighted by LoveMoney.com’s readers, namely that having enough money to live comfortably in retirement was a real concern, funding a pension was a worry, and affording health insurance or long-term care in later life was a pressing matter.

For expats, when it comes to long-term monetary concerns, there’s good news and bad news…

The bad news first – expats are less likely to have any form of state assistance in retirement compared to their onshore counterparts.  They are less likely to receive any (or a full) state pension, and they are much less likely to have any form of state funded medical or care assistance.  This means that their costs in retirement for pension and healthcare may be greater than those required by anyone who remains living onshore.

However, that’s where the bad news ends.  The good news is that expatriates generally have much more interesting saving and investment opportunities available to them once they become non-resident for tax purposes in their old nation of residence.

The likes of QROPS (Qualifying Recognised Overseas Pension Schemes) become accessible to many expats, which can see an advancement of their retirement income being potentially achievable for example.

QROPS are UK government back pension schemes that legitimately allow an account holder to avoid having to buy an annuity with their saved wealth.

QROPS account holders can have greater investment flexibility too, and some people can see a tax enhanced benefit derived from a QROPS, depending on the nation in which they are tax resident, where and how their QROPS is invested etc.

Expats can often save or defer tax on their savings too, and benefit from greater investment diversification and freedom – all of these are aspects which can see an expat enhance their wealth status more rapidly and successfully than if they remained living and working in the UK for example.

Research from HSBC has shown us that expat professionals earn more than their onshore counterparts as well, and it’s a well-known fact that there are many hubs around the world where expats can not only enjoy greater remuneration, but where they pay less income tax than in the UK as well.

All of these are positives in an expat’s favour as they look towards their long-term financial planning needs.  They are ways and reasons why expats can potentially intensively save or invest now for their retirement income and their long-term health care needs.

We would say to all those expats worried about their long-term money matters, take qualified, experienced regulated and expert financial advice sooner rather than later, and get a plan in place to protect your future financial position.  You have much greater potential to protect yourself from penury in retirement thanks directly to the fact that you’re an expat.

In terms of current or short-term money worries concerning our readers, these varied from worrying about clearing down debt, to paying for education/future needs of children, and from concerns about beating inflation to getting better interest rates and returns on saved and invested money.

Again, expats are clearly not immune to the same worries that many in the UK are experiencing.  However, expats do have many financial advantages over their onshore peers.  They can potentially earn more, pay less tax, enjoy tax enhanced savings and diverse investment options…

Expats need to take charge of their financial position however, identify and set monetary goals, be aware and understanding of their risk profile, and take qualified advice relating to the real options they have to make the most of their wealth status.

Our research has shown us that no matter where in the world you live, we humans all fear similar things when it comes to financial security and making the most of any money earned, saved or invested.  Instead of hiding from your fears, face up to them and get your financial future sorted today!

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