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10 Steps to Retiring Abroad

Dreams of those restful hours of retirement are what motivate most of us through the latter decades of hard work during the daily 9-5 grind. Enjoying a well-earned, more permanent rest beside the sea of foreign shores is a fantastic way to kick-off your retirement in style, much to the envy of those back at home.

However, the decision to retire abroad is not an easy one, nor one that should be taken lightly. As well as the fact that it may cause a ruckus amongst family members to hear that you’re jetting off across the water, there may be more complications behind the scenes which mean it’s not simply a case of booking that plane ticket and packing your suitcase.
Some people may already have a home abroad and are simply looking to make it a more permanent abode, whereas for others moving away from home is a completely spontaneous, spur of the moment decision. So whether this has been on the cards for a long time or thought up yesterday – here is a checklist of steps not to forget before you set off.

Step one: Where can you go?

One of the first things to consider is which countries you’re eligible to live in. It would be a shame to make elaborate plans for your beach hut in the Bahamas if you find yourself on a one way flight back to Heathrow before even crossing the border. As a UK citizen, you are permitted to live abroad in EU and EEA member states, however there may be stricter requirements when attempting to obtain a visa for somewhere further afield. It’s a good idea to check the website of the country you’re thinking of moving to and confirm the financial requirements you may have to meet in order to emigrate permanently first.

Step two: Consider the complications – Cost of Daily Living

You may be surprised at how the cost of simple items abroad can differ entirely to those in the UK. Basics such as beans and cereal, which are relatively cheap to pick up over here, can come with extortionate price tags overseas. It might be a good idea to stock up on items you know you’re going to struggle to find, and to check that you’ll still be able to live comfortably in the style you’re used to in your chosen destination. Even the most adaptable of us will crave home comforts at some point.

Step three: Consider the complications - Language

In most expat-heavy destinations, language may not necessarily pose a problem, but if you’re planning to move somewhere more remote or exotic, it could get tricky. Activities which are part of everyday life, such as taking a train or setting up a phone contact, could become a complete headache if conducted in a language you only half understand, or pidgin English. As we get older, it becomes increasingly difficult for our brains to pick up languages quickly, so it may be sensible to take classes well in advance to make sure the transition is as smooth as possible.

Step four: Transfer your state pension

Your pension is one of the most important things to consider before you move abroad, as it is likely to be your main means of income. Transferring your state pension scheme is relatively easy, although if you haven’t chosen an EU/EEA country things could become tricky as your pension will be frozen at the amount set by the government at the time of your departure, and won’t increase with inflation.

Step five: Transfer your private pension

Be careful with this one, as private pension schemes could be subject to tax if paid into a foreign account. However, if the pension scheme you wish to transfer to is registered with HMRC as a Qualifying Recognised Overseas Pension Scheme (QROPs), there may be certain advantages, such as a removal of the UK tax net barrier. Be careful though – although the UK has recently introduced a 25% tax free lump sum withdrawal system, other countries’ tax systems may not permit such a generous tax-free withdrawal.

Hollie Mantle

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