Spain remains the favourite retirement destination for British expats, according to a new poll.
The other top five destinations are France, Australia, Ireland and Cyprus, says MGM Advantage, the financial and annuities firm.
“Retiring abroad is a dream for many people,” said Andrew Tully, pensions technical director at the firm.
“The thought of an easier pace of living, better weather and potentially cheaper property than the UK can prove a strong draw. But without the right planning and advice you can quickly get caught out by the local tax laws. And that is before you look at your pension and other financial arrangements.”
He also listed some top tips for financial advice in retirement:
- Estimate how much your state pension will pay http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/StatePensionforecast/DG_10014008
- Look for independent financial advice from an established and regulated firm
- Ask HM Revenue and Customs for information about any UK tax liability you may have even though you are living overseas
- Check what reciprocal agreements are in place with the destination country regarding your UK state pension
- Find out about your welfare rights abroad
- Check the cost of healthcare in the country you are moving to
- If you decide to keep your property in the UK you will need to let your mortgage provider and insurance company know if it will be rented out or stay empty
- Find out the cost of living in the country you want to move to
- Tell the taxman, utility companies, financial institutions and your local council when you are leaving
- Contact the electoral register, and arrange for mail forwarding via the Post Office
“One often overlooked aspect of retiring abroad is what happens to your UK state pension,” said Tully. “If the country you’re retiring to has a reciprocal agreement in place with the UK then the UK state pension will be paid and increased as normal. However where there is no agreement in place, and that includes Australia and Canada, your state pension will be frozen and won’t increase.
“It is vital you seek professional financial advice well in advance of making the move. There are a number of firms who specialise in providing advice to expats, which could make the world of difference between the retirement of your dreams or an experience altogether more challenging.”