Retiring to a sun-kissed beach to watch a golden sunset with a cocktail in hand is living the dream for many – but is this just a fantasy for expats?
Moving overseas is a big step and needs a lot of planning, not least figuring out how much money you need to live comfortably.
The good news is that state and personal pensions are not just restricted to those living in the UK. Wherever they are, expats can draw down their pension benefits as if they were still in Britain.
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Where Shall I Move To?
Living overseas is different from taking a holiday. A bustling holiday resort lined with bars, restaurants, beaches and other entertainment is not the same as finding a home with handy shops, health services, banks and other facilities nearby.
A lot of research is needed to find the right place to live. Expats need to consider their lifestyle and culture as well as their finances.
Lots of questions need careful thought, like:
- Can you speak the language? If not, can you learn?
- What’s the cost of living like?
- Is healthcare accessible and affordable? Do you need to pay or buy insurance?
- Will you rent or buy a home?
- Do you need room for family and friends to come to stay?
- Can you take your car?
- Will you need to take a driving test?
- If you have pets, can you take them with you?
Renting a home to try a neighbourhood before buying is a good idea. Renting lets expats try different neighbourhoods to see what day-to-day life in your dream location is like.
Have a checklist of key factors you want from your home. Look at things like public transport and the location of amenities like shops, doctors and dentists.
Before signing any rental contract, visit the property at different times to see if the neighbours are noisy and what parking is like.
Always speak to an independent lawyer before signing on the dotted line or handing over money.
Check Out The Cost Of Living
With a whole world to choose from, investigate the cost of living of the places on your retirement short-list. You can do this on the ground by renting an apartment, from a hotel, or online.
One notable cost-of-living website is Numbeo, where expats post the prices of everything from a bottle of water to a new car. Expats can drill down into the data to find prices by city and country or compare costs in two cities.
Go through your bank account and figure out a realistic budget. It’s no good skimping here because glossing over financial cracks could lead to coming home prematurely – and that could come with an expensive price tag.
Remember to include unforeseen costs like property taxes, tax on pension income and a safety net to cover living expenses in the event of illness or a disaster.
Sorting Out A Residence Visa
Expats can’t rock up in a country and expect to have an open-ended invitation to stay. Every country has a multi-tiered immigration process.
For example, British expats on a basic visa can stay in the European Union for 90 days in any 180 days.
To stay longer, expats must apply for a residence permit. Applying for a permit means proving you have private health insurance and the means to support yourself without claiming local benefits.
Sorting out visas is another reason expats should rent rather than buy a home when they move. Visas and residence permits come with much red tape, and the outcome is not guaranteed.
Some countries let expats buy homes and other real estate, while others have strict rules about foreigners owning property.
Depending on age, make sure you know of any obligations with residency in another country – such as military service or investing in a business.
What About Life’s Little Surprises?
As time passes, life as an expat will throw up issues that need dealing with, like taxes, making a will and voting.
Where expats pay tax depends on several factors, including where they live, where the money is earned and if their new home has a double taxation agreement (DTA) with the UK.
Expats are likely to pay tax in the country where they live if they become residents, so they need to understand how this will impact their finances before leaving the UK.
Moving overseas also affects inheritance and wealth taxes. Britain has different inheritance rules to many other countries.
Lawyers will advise expats to have a will for each country where they have property or other assets, especially if they have a blended family.
British expats can continue voting in certain elections for up to 15 years after they have left the UK. To do so, they must register as a voter in the last constituency where they lived in the UK.
Expats Moving Abroad FAQ
Navigating life as an expat retiree comes with unique questions and challenges. Explore our comprehensive FAQ section to find answers to common queries about living, retiring, and thriving abroad. We’ve got you covered, from healthcare and taxation to voting and pensions.
A good place to start is the Foreign and Commonwealth Office’s living in-country guides, which cover most places popular with expats. The guides cover health care, visas, residency, local laws, and culture.
The UK National Health Service won’t cover expat medical treatment overseas, even with an EHIC or GHIC card.
The cards allow initial treatment on the same terms as offered to foreign citizens. For example, a British expat will pay the same if in Spain, and a Spanish patient pays for the same treatment.
It’s essential to realise a GHIC or EHIC won’t cover a patient’s repatriation costs, which could run into tens of thousands of pounds.
Expats can move their possessions from the UK to a foreign country – even their cars! But the process is long, tedious and expensive. In many cases, unless an expat has antique furniture or a classic car, it’s easier to sell up in the UK and buy new overseas.
The average cost of shipping a 20-foot container with contents worth £40,000 ranges from around £900 to Melbourne, Australia, to £1,250 to New York. These costs do not include pick-up, delivery or insurance.
The rules about proving an expat is vaccinated against COVID-19 vary between countries. Expats should ask about any travel conditions before they leave home. The British government advises British expats to seek a vaccination where they live rather than travel to the UK.
Expats can claim their state pension from overseas but may find their payment is frozen at the level of the first payment in some countries instead of rising with the cost of living.
Below is a list of related articles you may find of interest.
- Foreign, Commonwealth & Development Office (FCDO) – Living in Guides: The official UK government resource providing information on living in various countries.
- UK National Health Service (NHS) – Healthcare Abroad: Information on healthcare abroad for UK citizens.
- GOV.UK – State Pension if You Retire Abroad: Information on claiming the UK state pension from overseas.
- GOV.UK – Voting When You’re Abroad: Information on voting for British expats living abroad.