An increasing number of Britons are leaving the shores to spend their retirement abroad, a latest survey has revealed.
According to research from retirement income specialist MGM Advantage, more than one in six Britons over 18 – roughly 6.4 million people out of a total 38.8 million – plan to live overseas during their retirement.
Half of these overseas retirement seekers want to settle in Europe, with Spain being the most popular destination preferred by over 13% of the respondents. France took the second spot among the favourite overseas retirement destinations for Britons, closely followed by USA and Australia. Here are the top 10 destinations revealed:
|1. Spain||6. Canada|
|2. France||7. Italy|
|3. USA||8. South East Europe|
|4. Australia||9. India|
|5. Far East||10. Portugal|
The report also cautions those looking for overseas retirement to check if their pensions will increase in the country they retire in. If you retire to countries that don’t have a reciprocal agreement in place with the UK, your pension may not increase annually.
Andrew Tully, Technical Director of Pensions at MGM Advantage explains: “If you retired to Canada ten years ago, your UK state pension would now be worth 42 per cent less than if you had retired across the border in the US.”
“Or put another way, your pension would be worth £1,742 more a year by simply choosing the US as a retirement destination rather than Canada”, he says.
Experts believe it is important to talk to HMRC or a qualified financial adviser before you leave the shores. You must seek information on any UK tax liability you may have even though you will be living overseas. This way, you can have your UK pension paid to you in gross and taxed in the country of your residence – provided the country has a double taxation agreement with the UK.
Among other tips, experts also recommend the following if you are retiring abroad:
- Get an estimate of your state pension.
- Seek independent financial advice before moving overseas.
- Check what reciprocal agreements UK has with the country you plan to move to.
- Check the costs of living in the country you intend to retire to.
- Keep an eye on the exchange rates.
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