Over 6 million UK adults plan to move abroad in later life
An even split
In total, over 6 million UK adults are planning to retire abroad, with an even split between Europe and the rest of the world. Of the estimated 3.2 million UK adults planning to retire in Europe, Spain is the most popular destination with 26% of the vote. France follows in second place with 17% of votes. Italy comes in third place with a 10% popularity rating.
Looking further afield, an estimated 3.2 million UK adults are planning to retire outside Europe. The most popular destination is America, with 16% of votes. Australia follows in second place with 14% of votes. Coming in third place is the Far East, which pulled in 13% of votes.
The right planning
As is evident, a huge number of people harbour a desire to retire abroad. Thoughts of better weather, cheaper living costs and potentially cheaper property than the UK can be a strong draw. But, thinking that your regular holiday destination can also be your ideal retirement home might be hit with flaws. Without the right planning, savings and advice, you can quickly get caught out by local tax laws, exchange rates and other financial arrangements, turning a retirement dream into a potential nightmare.
You might also get a nasty shock later in retirement when you find your UK State Pension does not increase annually because the country you choose to retire to does not have a reciprocal agreement in place with the UK. As an example, if you retired to Canada ten years ago, your UK State Pension would now be worth 42% less than if you had retired across the border in the US. Or, put another way, your pension would be worth £1,742 more a year by simply choosing the US as a retirement destination rather than Canada.
The nation’s favourite overseas retirement destinations are:
5th: Far East
8th: South East Europe
MGM Advantage research among 2,028 UK adults aged 18+, conducted online by Research Plus Ltd, fieldwork 17–22 October 2013.
The UK full basic State Pension for a single person was worth £79.60 in 2004. From April 2014, it is now worth £113.10 a week, an increase of 42%. If the country you’re retiring to has a reciprocal agreement in place with the UK, then the UK State Pension will be paid and increase as normal. However, where there is no agreement, and that includes Australia and Canada, your State Pension will be frozen and won’t increase.