More than 6 million people in the UK are planning to retire abroad, whether in Europe or elsewhere. Dreams of idyllic places, warm climates and easy life can push you to think about spending your retired years elsewhere. However, with global economies shaky and lots of financial pitfalls in between, it pays to plan your retirement outside the UK really well.
Location to move
It’s not easy to choose the right country considering the huge number to select from. Even so, research best retirement destination, the lifestyle and culture of the place and how to cope with emergencies and unforeseen circumstances and expenses.
Once you’ve selected the country, rent a home or property at the beginning. It’ll open your eyes to events and daily happenings so you can really get a feel for the area. When purchasing a property, find legal advisors to comprehend local property and inheritance laws if any.
State pension claim
State pension can be claimed even if you’ve moved abroad. However, pension credit will end with a permanent overseas move meaning no weekly income top-ups thereafter. As you move, alert the IPC (International Pension Centre), including HMRC for proper tax payment. The state pension is payable in UK building society or bank account or an account in your new destination in the local currency. Pension can also be deferred, which gets you an additional state pension.
Pension increments abroad
If you are living in the UK your pension from the state increases annually. However, an increment isn’t automatic once you move abroad. Yearly increases of your state pension can be claimed if you move to Switzerland or Gibraltar, nations with agreements on social security with the UK or within the EEA (European Economic Area).
It pays to know whether to expect an increment in the country you intend to retire in, which you can find at GOV.UK.
No matter where you live around the world you can receive your workplace and personal pensions. If any increase is provided, you’ll receive it annually just as anyone living within the UK. Note that some pension schemes only pay into banks within the UK while others are open to paying into overseas bank accounts if required but will often come with additional charges.
Since the pension income is sent to you in pound sterling exchange fluctuations might affect it once converted into the local currency.
Prior to moving out do get in touch with your pension provider or scheme to know of any changes is to be expected. Carry out some research on exchange rates from sterling pound to the local currency to prepare yourself well.
Pension income tax
By moving abroad, you probably will be considered a non-UK resident, considering your state pension isn’t taxed in the UK. However, your new retirement destination might require that you pay tax. Other work and personal pension income could attract UK tax since its considered UK income. The pension can also be taxed again in your new retirement country. Nonetheless, those who’ve moved to locations with arrangements with the UK on double taxation won’t have to be taxed twice.
Do take a few minutes to read more on tax information to know what awaits you in the form of taxation before you move abroad on Gov.uk.
Voting in the UK
You won’t lose your right to vote automatically after moving abroad. You can vote in EU and general elections for up to 15 years to influence services and support provided to nationals from the UK living abroad for years.
Check more on your voting rights and expectations while abroad at the Electoral Commission portal.
Will execution after retiring abroad
Local UK laws and your retirement destination will definitely differ when it comes to assets management. To be on the safe side, create a UK will and another for your new retirement location following laws of each place as required.
Find local solicitors on wills and inheritance laws in the UK and abroad to help you meet any legal expectation surrounding inheritance and your will in both areas.
Don’t take it for granted that healthcare is better than or matches that of the UK before you move abroad. Look into the cost of healthcare and quality before moving out. Globally, the cost of healthcare and medication is always going up and looking into health cover and insurance is a good idea.
The UK is in agreement with certain nations on healthcare services. See the country by country NHS guide on healthcare access abroad. Moving to Switzerland or EEA comes with certain UK-paid for healthcare perks as well as for those with exportable pensions from the UK or other specific exportable benefits.