There’s no denying the fact that Britain is in a dire economic state and that this is highly likely to have knock on social issues – whether that be rising crime as some have predicted, or simply a feeling of hopelessness and negativity that pervades throughout the population.
Therefore, it comes as no surprise to us that those who can are actively contemplating a retirement abroad.
Yes, many who were already in the process of planning their escape have been forced to revisit plans as the pound has crashed and the housing market in the UK has weakened, but this has not put a dampener on the general appetite for an escape. In this article we will explain how to happily retire abroad – i.e., we will cover the groundwork that you need to do prior to a relocation to ensure that your move abroad is indeed a happy and successful one, and that you know in advance all about what you’re letting yourself in for. The good, the not so good and the absolutely brilliant!
1) Budget – never mind the currency at this point, all you need to know is that you will need to determine how much disposable income you will be left with each month from pensions and investments so that you can actually decide where in the world you can afford to live. You also need to consider the real fact that currencies fluctuate, sometimes in your favour, and sometimes very much against you. Therefore you never want to live up to your financial limit, just in case the exchange rate wind changes for the worse.
2) Priorities – when thinking about where you would like to retire abroad, you need to list out your priorities. Yes your relocation destination will be guided in part by budget, but you are still likely to be afforded quite a choice of nation depending on your budget. Therefore, list out your nation priorities and see which country best suits the requirements you have. Do you want a warm climate, do you need to be close to the UK, what about healthcare and crime rates, Sky TV and British expatriate social clubs? Think about what you can live with and what you can’t live without.
3) Family – chances are you will be retiring abroad and leaving your family behind. Your children and grandchildren will miss you and you will miss having them around too probably, so factor in their need to visit you and your desire to return ‘home’ to the UK sometimes when looking at both your financial budget and where in the world you would like to move to. Also, don’t forget about accommodating family and friends from the UK when you examine which property to rent or buy abroad. A 1 bedroom apartment is perhaps perfect for you for 10 months of the year, but an impossibility for the couple of months when you are inundated with visitors!
4) Health – whilst you are hopefully in the best of health these days, there may come a time when you require some medical treatment, or even when you reach the point of dependence and need a home help or even permanent care in a residential home. What are the standards of care like in your new country, how well equipped and financed is the health care system, can you afford to be ill abroad, do you need health insurance or is there a reciprocal agreement in place with Britain. Once you are non-resident in the UK for a period of 12 months or more, you are no longer entitled to NHS care free of charge. So do not neglect to look at your potential healthcare requirements.
5) Taxation – however dull talking about taxation is, it’s a fact that in many countries abroad you are taxed on your pension income. And whilst we think taxes in the UK are high, in some countries they can be even higher! Of course, there are exceptions – in Cyprus tax on retirement income can be as low as 5%, and in some countries such as Belize and Malaysia, there are incentive programmes in place to attract international retirees, and part of the incentives available include having no personal income tax liability. So, look carefully at any obligations you will have, both at home and abroad. Also, don’t forget inheritance tax. You might be moving to a country that levies 0% IHT, but you’ll most likely still be considered domiciled in the UK and therefore your worldwide estate will actually be liable for British inheritance tax.
6) Permission – as a British citizen we are fortunate to have a very powerful passport, however, there are still many countries in the world where we need visas and permits to enter and reside. Look closely at the rules that relate to your nation of choice, and ensure you can meet the criteria before you plan your retirement abroad.
7) Due Diligence – and finally, last but certainly not least – you need to spend a significant amount of time researching your chosen nation of choice. It’s no good picking Belize as your perfect retirement home if you’ve never been there and lived through the most humid days or the tail end of a tropical storm! You need to read about a country, ask people via forums about the nation and ultimately, you need to visit the country in question for a prolonged period of time before you decide to move there. Retiring abroad requires a significant initial financial outlay as you organise everything from a new home and car to shipping your personal goods, you don’t want to spend this money in vain only to find that you hate living in Belize and actually would have been far happier in Brittany.