Pension Abroad: Pros and Cons

Finding somewhere to live

if you’ve just discovered a hidden treasure with a rock-bottom price tag, refrain from whooping for joy for a moment. You still need to unearth the hidden extras. 

We may all grumble about the cost of moving house in the UK, but in other parts of the world the route to home ownership can be equally, if not more, treacherous. Some of the things to watch out for include the following if you’re thinking of buying abroad:

  • VAT – we currently don’t have VAT on property in the UK but it crops up elsewhere in Europe.
  • Capital Gains Tax (CGT) – in lots of countries you’ll get clobbered, even if your property is your only home.
  • Next add estate agent fees, land tax and the cost of the notary.
  • Remember to hire a bilingual lawyer.
  • Think exchange rates – in the months that it takes to buy the average property, fluctuating exchange rates could add thousands to the price of your home.

Claiming your pension overseas

State pension

The good news is that there’s nothing to stop you claiming your State pension while living abroad. In fact, around one million UK pensioners are already doing this. You can opt to have it paid into UK bank account or if it’s more convenient, directly into a local bank account in your newly adopted country.

Watch out though, because not everybody automatically gets the extra cash when the State pension rises. To qualify you have to live in the European Economic Area or in one of the countries with which the UK has a reciprocal social security agreement.

The Department for Work and Pensions (DWP) has leaflets detailing the ins and outs of the reciprocal social security (please refer to our Links page).

Personal and Company Pensions

As for other pensions, it would be wise to find yourself a good independent financial adviser (such as Plan Your Retirement, of course) who can explain all about paying your pension in your new home country. You’ll need to find out if your Company pension scheme has to be paid into a UK bank account, or if your annuity company charges hefty fees for transferring money overseas.


Full Passport

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

What to do when you arrive

  • Register with the local authorities. If you’ve moved to an EEA country, you have to apply for a residence permit within three months of arrival.
  • Register with the British Consulate.
  • Open a local bank account so you can pay bills and receive your pension or income from any investments you may have.
  • Check local driving rules and regulations. You may need to apply for a local driving licence or, horror of horrors, retake your driving test.
  • Enrol in a language course.

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