According to a recent survey by the National Association of Pension Funds (NAPF), almost half of Britons would consider moving abroad after they retire in order to live more comfortably in a country with lower living costs than the UK.
46% of the more than 2000 people who took part in the survey said that they would leave the UK in order to make their pensions stretch further. Most people are not very optimistic about their retirement prospects in the UK, and 60% of those asked said they do not expect to retire comfortably in the UK, while only 15% think they will.
In this unstable economic climate, with increasing living costs in the UK and falling annuity rates, most workers should be saving more than they currently do to be able to retire comfortably in the UK. While the average retirement income for British pensioners is just over £15,000, according to research by MGM Advantage, around £7,000 extra per year would be needed for a comfortable retirement. As NAPF’s survey shows, however, 34% of workers said they would prefer to move somewhere cheaper for retirement than saving more for their pensions. The proportion of workers who are enrolled in workplace pension schemes has also fallen from 55% to 48% since 1997.
Many British retirees are planning to move abroad so as not to see their standards of living drop after retirement. As Joanne Segars, chief executive of NAPF said, “In a globalised economy people will scour the world for the right lifestyle at the right price. We expect to see more ‘grey flight’ as people try to squeeze the most out of their pension.”
The most popular international destinations for British pensioners are Spain, Canada, the USA, France and Australia, but locations, such as Brazil, Cyprus and Thailand are also becoming increasingly popular. The appeal of these destinations lies in the cheaper living costs, an often better climate, proximity to the UK in the case of France and Spain, and a lack of language barriers in the case of the USA, Canada and Australia.
Retiring abroad can be a great experience if you plan the move carefully and think you’ll enjoy a genuinely better lifestyle or want to enjoy a sunnier climate. If you move abroad, however, only because of the financial pressures you experience, your move might turn out to be a more negative experience. As pensions minister, Steve Webb commented: “I want people to have the freedom to make their own choices when it comes to retirement.”
Whether you retire abroad should not be determined by the financial difficulties you might have in the UK and it’s important to consider all the consequences of this lifestyle change, including the distance from family and friends, the new culture and the new language you may have to get used to. If you do not think that you would enjoy living abroad permanently, it is important to consider saving more for your retirement.
Before moving abroad, you should make detailed financial calculations and make sure you know how much you can expect as your retirement income. Healthcare considerations should be a priority, and you should ensure that you’ll be able to access good quality health care in your new country. You should also think carefully about where you are planning to move, and if you want to buy or rent a property abroad.
Are you planning to retire abroad or are you a pensioner already living abroad? Leave us a comment and share your reasons for moving and your experience of being a pensioner in a different culture with us.
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