Well, well, well, just when you thought that you’d heard all the reasons possible to make you actively contemplate starting a new life abroad, along comes evidence from the Alliance and Leicester that reveals that not only are expats saving tax but they’re saving more money than their peers when they move abroad too!
So, expats are often paid more, they pay less tax, they save more and are happier than those they leave behind in the UK – if recent surveys are to be believed – so errm, what exactly are we all waiting for?!
Indeed, the survey from Alliance and Leicester is striking in that it reveals just how much wealthier expats are than their peers back home; thanks in part to their more attractive salaries, but thanks also to their attractive tax status.
The survey has highlighted that those who expatriate to live in the Middle East, in countries and emirates such as Dubai for example, are the most well off of all expats in terms of the amount they manage to save per household.
Of course, if you’re living in a country where there is no income tax that has quite a positive effect on your income! Imagine not paying tax, and it being legal not to! How fantastic a situation! Well, that’s probably why expats in the Middle East are also happier than they were when they lived in the UK – according to a survey by OzForex and another one conducted by NatWest earlier this year.
So, expats in the Middle East – particularly in the oil rich states – have managed to save on average GBP 125,000 per household. Naturally not having to pay tax means that more of one’s income is disposable, and if one can avoid the temptation to live up to one’s means one can save excess income in offshore, qualifying, tax-free savings and investment products too, which has a compound effect on the money being saved.
But it’s not just the expats living in Dubai and the Middle East who are better off than the average UK household, no indeed. According to the Alliance and Leicester survey, expatriates living in North America have managed to amass up to GBP 70,000 per household too. That’s quite impressive when you consider that North American nations are traditionally high tax environments – but it proves how financially savvy many expats are. They are clearly aware of the expat advantage that relates to maximising one’s offshore, tax saving advantages.
Note: in the UK the overall savings rate is a total of GBP 820 billion that suggests that the average household has amassed GBP 31,300 in savings, and it is against this figure that all others are being compared.
Expats living in Central and South American countries such as Belize or Argentina are the least well off with ‘only’ an average of GBP 26,000 per household – but in our opinion at Degtev this is not entirely fair or accurate. For a start, very few houses in the UK have GBP 31,300 in savings, in fact, most are in debt – so the average is likely to be far less because it’s a well known fact that the minority have the majority of money in the UK. Looking at expats as a demographic on a nation by nation basis and working out the average they have per household is far more accurate. There are fewer expats, they are less likely to represent such a broad divide between rich and poor either. So to say that those in Central and South America are worse off than their peers back home is probably very inaccurate. They may be less well off than other expats however, but we’re also pretty sure they’re happier with their new life than their peers in the UK – and happiness rates higher in our book than pure wealth!
So, if you’re a happy expat keen to find out more about expatriate tax saving and how you could maybe maximise your own savings and investments, take qualified financial advice from an expert in all things offshore.