Retire to the sun - the dream continues for many

22/03/2010

Despite the economic effects of the recession and the well publicised problems seen with, in particular, the Spanish property market many people approaching retirement still dream of living abroad.

Some four out of ten people that are approaching retirement are actively considering moving abroad when they retire – this is according to a survey recently commissioned by the Foreign & Commonwealth office.

It seems that the lure of better weather, relaxed days, sandy beaches and a different way of living still hold their attractions for many with some 42 per cent of people over the age of 55 reporting that they were actively thinking of relocating overseas.

But the report goes on to sound some wise words of warning to those who are considering making such a move and in particular to carefully examine the financial implications of doing so.  Whilst moving abroad doesn’t prevent people from still receiving their state pension this will continue to be paid in sterling and not in the currency of the country you move too.

The implications of this are that people need to take into account the potential effects of currency fluctuations – many ex-pats have suffered from receiving a fixed income in sterling from their UK pensions but with the pound declining in value against the euro and other major currencies they have found that when converted into local currency they receive less than previously meaning in real terms their standard of living has declined.
The Foreign Office website also gives some more helpful tips on what to take into consideration before making the decision to move abroad – these include:-
·         Familiarise yourself with your new destination before moving there permanently.
·         Understand the different laws, regulations, and customs abroad.
·         Budget correctly to take into account currency fluctuations. 
·         Understand the different healthcare systems abroad. Unlike the NHS residence-based system, many countries in the EU have a contribution-based system, which means that you may have to pay into the social security system in order for you and your dependants to get state healthcare.
·         Be aware of your changing needs as you get older, such as potential increased medical care and as before, know what health services you are entitled to.
·         Know your income. Unless you are a resident in the UK you may not be eligible for Pension Credits or Tax credits and if you are outside the EU your pension may also not be increased annually.
For further information and advice visit www.fco.gov.uk/en/travel-and-living-abroad/