Most popular countries with ‘best standard of living’ for retirees – tips to keep pension
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New research by PensionBee revealed almost half of the wannabe expats are motivated to retire abroad as a result of COVID-19 travel restrictions inspiring them to travel more in later life. However, the study also revealed most people worry about losing out on annual basic State Pension increases due to the UK’s “frozen pension” policy.
PensionBee surveyed Britons who want to retire abroad on their dream destinations, as well as how they’re preparing financially.
The survey revealed 71 percent admitted being concerned about extra fees or delays accessing their pensions abroad.
The majority of respondents agreed the most popular motivation for retiring overseas is to have “a better standard of living” followed by to “experience a different culture and country”.
Other factors include “better weather”, “property being more affordable”, “lower taxes” and “better healthcare services”.
The majority of wannabe expats also said they have saved or will save more towards their pension pot as a result of wanting to retire abroad.
Romi Savova, CEO at PensionBee, explained: “Moving abroad and managing a UK personal or workplace pension can seem like a daunting prospect, so it’s encouraging to see that future expats are already thinking about how they need to prepare financially.
“Circumstances such as pension drawdown fees, fluctuations in exchange rates and living in a post-Brexit world perpetuate the need for savers to thoroughly research their dream retirement destination before making any firm decisions.
“This can help ease concerns around the cost of living abroad and the accessibility of a UK pension once a saver has started their retirement outside the UK.”
Top destinations Britons would like to retire to:
1. Spain
2. France
3. USA
4. Italy
5. Greece
6. Portugal
7. Canada
8. Dubai
9. Cyprus
10. Australia
PensionBee shared its top tips for looking after a pension if Britons plan to move abroad.
Will your defined contribution pension be affected?
PensionBee explained: “Those with a defined contribution pension can continue to have their savings managed by a UK pension provider. It may not always be possible to transfer your pension abroad and it’s important to check eligibility to avoid heavy tax penalties upon transfer.”
Can you claim your UK pension if you live abroad?
“UK pension providers won’t usually let savers draw down into an overseas bank account. For the few providers who will agree to pay directly into an overseas account, there are often fees associated with doing so. If a saver has a bank account in the UK, they’ll be able to draw down into this. However, they’ll likely face transfer fees and exchange rates, so it would be worth investigating low-cost overseas transfer services,” they said.
Will you qualify for tax relief if you live abroad?
PensionBee said: “Savers that are still paying into a UK-based pension from overseas will only qualify for tax relief if they’ve lived and paid taxes in the UK during that tax year, or are classed as a ‘Relevant UK Individual’ for tax purposes. They may only receive tax relief on contributions up to £3,600 gross unless they have relevant UK earnings within the tax year.”
Can you claim your State Pension if you move abroad?
PensionBee clarified: “Savers can receive their UK State Pension if they move abroad. This works in the same way as in the UK and can be paid into a UK or international bank account. If you live outside the UK and are paying into an overseas bank account, the State Pension will be paid in the local currency, so the amount received is dependent on the exchange rates at the time.”
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