RETIRING abroad has been the dream of many a British worker – sipping cool drinks under the shade of a palm tree, eating out at a fraction of UK prices, enjoying the sunshine without the need to make hay.
Those who are already expats will take a more realistic view of what the future may hold and are more likely to have planned for their retirement in the sun.
But even the best-laid plans have been rocked by Brexit, so now is the time to go over it all again and if you are in any way uncertain, take advice from an expert.
As far as the UK state pension is concerned, the situation is clear, at least for now. Britons moving to countries within the European Economic Area (the EU27 plus Switzerland and Gibraltar) will continue to benefit from the UK government’s “triple lock”, so their state pension will keep pace with inflation.
But it is important to get advice if you are considering a move overseas because the tax position depends not just on where you live, but where you are domiciled. For instance, HM Revenue and Customs may still consider you to be liable for UK tax if you have a British property, or if it is clear you intend to return.
Even if you do not intend to retire any time soon, it is important to plan for it. The earlier you start, the better result you are likely to achieve. Ask yourself these questions:
- At what age do you want to retire?
- What standard of living do you expect?
- Are you planning to retire abroad, or in the UK?
If you are an expat and plan to retire in the UK, you must think about the most tax-efficient way to get back onshore the money you have saved. Offshore investment funds are often the cheapest and most flexible way for expats to save for retirement. If you are in a tax-free jurisdiction, then you will have, in effect, the benefit of a full tax rebate on contributions. Charges on these are likely to be lower than an offshore pension, which will help boost returns.
You should always take independent financial advice if you are unsure. Woodbrook Group are experts in this field. We offer a free pension review, helping clients plan for the future. We can help you understand your options, how to address your income needs in retirement and how much wealth you will need to support it.
Proper advice is particularly important for expats since they are likely to have worked for employers in several countries, making it harder to keep track of pensions.
Research shows that more than a third of expats have misplaced their pension pots. If you are in that unfortunate position you should consult an independent financial adviser with
Preparation is the key to a happy retirement. Don’t wing it, plan it. And never hesitate to take advice.
*For more information, contact our team at the Woodbrook Group Office in Marbella: Av. Ricardo Soriano, 72 Edificio Golden Portal B, 1ª Planta 29601 Marbella, Málaga, Spain.
Telephone: +34 952768471