How To Take The Heat Off Retiring Abroad

How To Take The Heat Off Retiring Abroad
People watching the beach

So you spend all your work life, dreaming about retirement, but when it actually gets here it turns out to be quite a stressful experience. Life just isn’t fair sometimes.

Perhaps you are trying to figure out what you will do with your time. Perhaps you are working out whether you will have enough money to survive on, or perhaps you are contemplating retiring abroad.

If it’s the latter, you may have your work cut out for you, but once you have got over the hurdles, you can start to enjoy the retirement you always dreamed about. Here we give you some pointers for retiring in style.

Getting To Grips With Taxation
Taxation is applicable to retirees in most countries and expat tax can become quite complex. As a general rule of thumb you will need to pay your UK taxes whilst the HMRC still recognises you as a UK resident.

The good news is that if you are moving to France, Spain, Italy or Portugal, you won’t be taxed twice on your income. This is due to the double taxation agreements between the UK and these countries. So the income you receive from pensions, bank and building society accounts, annuities and bonds will only be subject to one tax payment.

How To Receive Your Pension Abroad
Even if you move to another country in the European Union, you will still be entitled to your UK pension. More good news is that your pension will continue to increase along with inflation in France, Portugal or Spain. In some countries you may need to pay a charge on your pension. For example, in France you may need to pay what is known as the social charge which is charged at 7.1 per cent.

Long before you make your move abroad it is advisable to speak to a Pension Advisor who has experience of dealing with expats pensions. They will be able to tell you what preparations you need to make before you retire abroad and how to move and receive pensions in the best way.

You May Still Be Able To Claim Benefits
Just because you are moving doesn’t mean your benefits will necessarily stop. If you move to Europe, you might be entitled to claim benefits in your new country of residence. For example, you will still be able to claim incapacity benefits in some countries and even the winter fuel allowance may still be payable when you move. However, benefits such as pension credits will stop once you are recognised as a non-UK resident.

Know Your Currency Risk
If you are moving abroad you may receive your income in a mixture of sterling and euros. Many pension and financial experts advise their customers to move their non-pension assets into accounts that are linked to the euro. This is because exchange rates can dramatically affect the interest you earn in the UK. For example, that 5% interest you have earned on your savings account could be wiped out when you come to transfer the money to a foreign account or exchange currency.

Again, speaking to a financial advisor can help you to understand your currency risk and how to move or use your money so that it brings the best returns.

Retire To A New Country With Confidence
Retiring should be a fun and exciting opportunity. After all, you have worked hard all of your life to get here. By looking after your money, knowing how much tax you are liable for, understanding your currency risk and checking out which benefits you can receive, you should be able to make your emigration a smoother process.

Aviva Tabachnik is Partnerships Executive at - google +


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