Top retirement hotspots
Want to leave behind the dreary British weather in your golden years? Read on to discover the top five most popular countries for retiring abroad.
Pension provider Standard Life has published a list of the most popular hotspots for those who want to retire abroad. With its warm weather and wealth of expats to socialise with, it’s hardly a surprise that Spain tops the list for UK retirees.
Top five retirement hotspots
1. Spain
2. France
3. USA
4. Canada
5. Ireland
Andrew Tully, Senior Pensions ad Policy Manager, said: ‘Retiring abroad is a dream for many people but without careful planning and advice, things can potentially go wrong very quickly’.
Not having adequate financial resources could devastate your retirement plans.
Retiring abroad and the state pension
In order to qualify for any increases in the UK state pension, you’ll need to relocate to a country that belongs to the European Union – including Gibraltar and Switzerland. Further, there are a number of countries that have a reciprocal social security agreement with the UK such as Turkey, the US and Jamaica.
If you don’t live in one of these countries, your state pension will be frozen at the rate you received when you left the country. For instance, those who have retired abroad might not qualify for the increase to the state pension planned by the Lib-Con coalition for next year.
‘Over a 20 year retirement, your basic state UK pension could halve in real terms if a reciprocal agreement is not in place,’ says Tully.
He adds: ‘You need to be very careful your retirement income is sufficient to cover your living costs over a long period of time.’
According to the Standard Life research, popular retirement destinations where you will not qualify for increases include Australia, Canada, New Zealand and South Africa.
To check whether your destination has a reciprocal pension agreement, your best option would be to contact the Department for Work and Pensions.
What about private pensions?
If you have paid into a private or occupational pension, you should be able to collect your money wherever you live in the world. However, it’s a good idea to consult the pension provider to make sure it will make payments into a foreign account. If not, you may need to keep a British bank account open.
Before you move abroad, it makes sense to carefully consider how exchange rates and foreign tax laws will affect the value of your savings and spending power abroad.
An independent financial adviser should be able to explain your options and help you decide how to manage your money outside the UK.
For more information, see ‘Do you dream of retiring abroad?’.
**This material is for information purposes only and should not be considered financial advice. We strongly encourage our readers not to rely solely on this content, but to seek independent advice when making financial decisions.**
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