Finding a place in the sun is the dream of many people who are approaching retirement age. Compared to previous generations, a far higher proportion of today’s retirees will have taken a regular holiday abroad. They draw on a host of happy memories gathered from years of problem-free travels – something that’s bound to make them more open to the idea of living outside the UK. Suitcases full of tinned baked beans and tales of ‘funny’ foreign ways are largely a thing of the past.
So the mind set may not be a problem, but it’s abundantly clear that preparing to retire abroad involves a great deal more effort than planning a holiday.
Retiring abroad in figures:
So let’s look at some of the most important things you should be thinking about if you’re planning on leaving the UK behind when retirement comes along.
This issue could not be considered without giving some reference to Brexit – Britain’s plan to exit the European Union by March 2019. As with so many areas of Brexit consideration, the implications for those who have retired abroad, or are considering doing so, will not be known until the current negotiations between the UK and EU are concluded. These negotiations, for example, will consider if and how your state pension should be increased if you retire abroad to an EU country. Until the negotiations are concluded, the UK remains a member of the EU and all current rules apply. This article is written based upon today’s rules.
State pensions and other benefits
When moving abroad, one of the first things to consider is your state pension. A recent government survey of retirement income said that state benefits, including the state pension, made up about one-third of a retired couple’s gross income and more than half of a retired single person’s income.
Given that the state pension will on average make up anywhere between a third and a half of your income, it’s vitally important to understand what happens to your state benefits when you move abroad.
The amount of state pension you get currently increases each year in line with something called ‘the triple lock’. This means you’ll receive whichever of the following is the highest:
However, once you move abroad, your state pension will only increase if you emigrate to certain countries. These are currently:
Looking at it the other way round
In addition to state pensions, you may also be eligible for other state benefits, such as the disability living allowance or the personal independence payment. Look into whether these benefits will continue to be paid should you decide to emigrate.
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