Thinking of retiring abroad?
Updated 10 August 2020
You may be planning to spend your retirement in a different country - attracted by the sunny days, coastal locations or an easier pace of life.
There may also be financial advantages too: Property may be less expensive, the cost of living could be lower and the taxes you pay might be less than in the UK (though tax treatment depends on the individual circumstances of each person and may be subject to change).
If you're considering moving to another country you should find out as much as possible about the implications of a move overseas, before you make a decision.
What happens to my State Pension if I retire abroad?
Your State Pension can be paid to an account in the country you're living in or to an account in the UK. It currently increases each year in line with a measure called the triple lock and if you move abroad you may still benefit from these increases depending on which country you move to. Your state pension will be taxed if you live abroad. You can find more information about living abroad on the UK government website.
How would I arrange for my private or workplace pension to be paid abroad?
Most private and workplace pensions can be paid into an overseas account on request, but you may have to pay extra charges and your pension may also be taxed before you receive it.
You could transfer your pension into a qualifying recognised overseas pension scheme (QROPS). It's important to note that there could be tax implications for transferring your pension to an overseas scheme and we recommend getting financial advice before making any decisions. There may be a charge for this.
What else should I think about?
This isn’t an exhaustive list, but it does cover some of the key issues you should think about:
- Tax rates. How do tax rates compare with the UK and how will this impact you?
- General costs of living. The cost of food, eating out, clothes and so on.
- Property prices. Many people may be attracted by the prospect of cheaper property prices.
- Healthcare. What‘s free and what you have to pay for (and the likely costs).
- Other considerations. For example, some countries insist you invest money in the country often at low rates.
It’s important to take the time to consider all of your options. Moving to another country to start your retired life may be an invigorating and rewarding experience, but it pays to do your homework first.