Living Abroad when you retire

Retiring abroad to a place in the sun is becoming a reality for an increasing number of people

Every year, more and more of us stop dreaming about leaving the UK behind and turn it into a reality. There are now over a million retired British people living overseas and this is forecast to rocket to 5 million by 2020.

Many people have held the dream of living overseas for much of their working life and as they approach retirement, with the right investment advice and proper pension planning, they can realise their dream of expatriate living.

Before you pack your bagS

But before you go putting your house on the market, sit tight for a while and have a really good think about what retiring abroad would mean for you and your family. Experts tend to suggest that you spend up to two years preparing for an overseas move.

We’ve addressed some of the typical questions we get asked by people considering spending their retirement years in the sun.

Do I want to retire abroad?

The first question to ask yourself is “Do I want to retire abroad?” Make sure you aren’t just suffering from the Grass is Greener syndrome. You may have been on holiday somewhere and thought “this would be a nice place to retire” – but – hold on, think rationally about your holiday destination and instead try to look objectively at what it offers in terms of the basis for the next stage in your life. Would it make more sense to consider a second home in the UK? 

Try putting together a list of all the things you want from your new life abroad and think about what you’ll miss when you leave the UK. Also, have a think about whether you want to leave for good, for a few years or even if you want to go in for what’s known as ‘seasonal retirement’, where you buy an overseas property and spend the UK’s long winter months abroad but come back in the summer.

According to Government statistics, there are currently over 55,000 British people receiving their State pension in Spain, 35,000 in Italy, 24,000 in France and 6,500 in Portugal. But please bear in mind that there could be significant financial and tax implications moving abroad. This is where Plan Your Retirement can help you.

Peaceful Walk

According to the Centre of Economics and Business research, average UK property prices will climb by 4.7pc

How much will I have to retire on?

The next thing to do is to try to work out how much money you’ve got to finance your dream of living abroad. Spend some time calculating your pension income in retirement. Find out the current value of your pension contracts or annuities. As this area can be quite complicated, you should consider seeking retirement advice from Plan Your Retirement – again, this is an area where we can help you.

In terms of your UK State Pension, you can request a forecast telling you in today’s money the amount you have earned and what you can expect to receive on retiring. You can do this by filling in form BR19 from your local social security office or by contacting the Retirement Pension Forecasting and Advice Unit (RPFA) on 0191 218 7585. You should also check the section on claiming your pension for details on how to receive both State and personal pensions abroad.

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