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Why Offshore Financial Planning is Critical Retiring Abroad

Why are hundreds of thousands of public sector workers on strike in the UK today?  Because of proposed pension reforms that will affect when they retire and how much pension they will receive.  This proves that there’s a bottom line when it comes to retirement.  And it’s not about putting your feet up, having more spare time or enjoying greater personal freedom.  It’s all about the money.

For many people it pays to retire abroad because their money goes far further in lower cost nations.  However, as research from currency experts HiFX shows, many retired British expats are failing to make the most of their offshore financial status and are suffering as a result.

This is why offshore financial planning is absolutely critical when it comes to retiring abroad.  If you’re planning or just dreaming about living a better life in a beautiful nation when you retire, read on for top financial planning tips.  They may make the difference between a frugal retirement abroad and an affluent one!

If you want to move abroad when you retire to enjoy a better lifestyle in an enviable climate and you want to be able to afford to do so, you need to make the most of whatever pension and investments you have.

You also need to think about how you bank internationally, transfer currency abroad and whether you should transfer your pension to a QROPS for example (a qualifying recognised overseas pension scheme).

In fact, there are a number of key criteria to consider when retiring abroad, and if you visit our dedicated retirement abroad channel you’ll find many useful articles to help you research your options.

However, the very first place you should start is with the money matters that will affect your quality of life.

In a recent article on the Expat Forum Ray Clancy clearly identified why living overseas is not getting any easier for British pensioners.  Clancy cited research from aforementioned HiFX that shows how much the average sterling based pension has dropped in terms of value against currencies like the euro.

Furthermore, Clancy highlighted an issue that we have often commented on; that British pensioners lose out when moving their pension and investment income between currencies.

In an article we wrote back in 2009 entitled ‘Helping Expats & Overseas Retirees Get More Out of Regular Money Transfers’ we discussed how and why expats can and should consider fixing their rate of exchange.  And whilst that article is still absolutely relevant to those who keep their pension and investment income and assets in the UK, there is perhaps a better alternative available to many who want to retire abroad.

If you haven’t heard of qualifying recognised overseas pension schemes yet then our beginners’ guide to QROPS is the best place for you to start.  These are pension schemes backed by HMRC and the British government, and ideally suited to many people who want to live, work and retire abroad.

QROPS can enable you to transfer your British pension abroad so that you can potentially avoid currency exchange problems when you retire and draw an income.  They allow you to avoid having to buy an annuity with your pension at a time when annuity rates are historically low.  Furthermore, QROPS can offer greater investment freedom, potential tax breaks and a potentially better outcome in terms of your pension’s investment.

These are technical pension solutions that do require expert financial advice however.  But don’t let that put you off.  After all, in seeking offshore financial planning advice from a qualified, independent and regulated adviser you will find out how financial advisers can also offer better interest rates on offshore savings as well.

If you’re worried about offshore financial planning and finding a good adviser to help you, we’ve identified key questions to ask your expat financial adviser so that you can ensure they’re giving you best advice.  We can also put you in touch with an adviser in your area if you contact us.

With an offshore financial adviser’s help you will be able to identify how you can make the most of the pension and investment income you’re going to receive when you retire.  In so doing you will hopefully be able to afford to retire abroad comfortably.

And finally: a very common question that those retiring abroad also have relates to bank accounts.  If you want to know whether you can keep your British bank account open when you move abroad or whether you need an offshore bank account as well, our offshore banking section covers this entire issue.

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