The Costs Involved Of Retiring Abroad

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You have just finished your final day at work after 40 consecutive years with the same employer, not many people can say that in this market place, you are getting your pension benefits in a months time and you want to start planning for your move abroad, but you are not sure where to go and how much it will cost. A recent survey by Aon Consulting for the over 50's life insurance and pension markets, carried out on a multi national basis, asked who would like to stay in their country when they retired, the Spanish came back with a resounding 87% followed closely by the French with 81%, the Brits on the other hand only 43% wanted to stay within the UK, this must say something about living here.

If you are considering moving abroad there are many financial considerations that you will have to take into account, taxes, utilities, legal expenses, exchange rates, property prices, costs of fuel/cars, living on a day to day basis. So how many Brits want to move abroad when they retire, well 25% want to live in Spain followed closely by USA and Australia.


A good starting point would be taxes; your local HMRC will be able to give you a forecast on your state pension provision and also what tax liabilities you would have when moving to your new country. Depending on what country you decide to move to you could have a liability in both countries. If you are in the UK for more than 183 days per year or 91 days per year over a four year period you would be liable for tax in the UK. Do not worry though as the UK has a "Double Tax Agreement" with Italy, Spain, Portugal and France, so you would not fall into the trap of paying more than you should. This is not the only consideration that you should take on board, depending on how your assets are set up tax will be spread among them as to what jurisdiction, anything that applies to both countries you should expect a rebate back from HMRC.

Wealth taxes are another tax that British citizens need to be aware of, France and Spain will tax your wealth on your worldwide assets, the French would have taxes starting at 0.55% up to 500k to a maximum of 1.8% starting at 15.5m, that's if your lucky enough to have this much in your bank account. The Spanish rates begin at 0.2%, though you will also get 150k exemption allowance on your main residence and the first 108k is exempt for "personal allowance". This would effect what are in the UK tax free savings (ISA's Tessa's and Pep's), even if you where still in the UK they could be liable to tax in France, Portugal, Spain, Italy to name a few. You might want to look at cashing these investments in when the time is right and reinvesting them in your new country, but get advice before you do this.


Bags are packed, car fully loaded, full tank of gas, house emptied, have you forgot anything? Well after reading the above you might have some concerns, but don't let this put you off, things will seem strange for a while, not just because of the taxes, you will be moving to a new country that has a different currency, different language, different foods. Taxation as it stands will continually change even within the UK, so don't be alarmed, get some independent advice and a full insight into your tax liabilities before you make the final voyage.

Wills are a subject that you most probably have not even thought about, the main reason for that is, you may think that your existing Will in the UK will suffice, wrong! You need to get a new Will as soon as you possibly can as you are in a new country and they have their own laws, get one that mirrors you existing one, but also make sure that you have thought about worldwide assets and inheritance tax, as different countries have different taxation laws on death. So why do so many people look at retiring in say Spain, well here is an interesting stat, currently Spain has 74,000 ex pats this has changed dramatically as only 10 years ago there where only 26,700 living here then. So why such a big change, well quite simply you are still entitled to your state pension and a contentious winter fuel payment, which seems a bit strange as you are living in a country that has 365 days of sunshine.

If you thought that taxes, pensions and wills where all you had to think about before the big move think again. There are additional costs that you may have discounted. You may have looked at getting a container to move all your furniture etc, but when you saw how much it would cost, you decided that it would be better to buy the white goods out there, do some research and get an idea of what it would cost to kit the home out, you might have forgot to include things like computers if your that way inclined, internet service provider, telephone even plug adapters all add up. Taking the trustworthy car with you, well don't forget to get a quote from your insurance company before you leave as there mat be an additional charge as they drive on the wrong side of the road.

So where are you looking to move to? City or countryside, there will be a huge difference in cost which in essence could save you thousands of Euro's, is it the hustle and bustle of a city or is it that you have no transport, or is it the idyllic rustic lifestyle that's required so you can potter around in the car. House prices are not as robust in foreign countries that that of the UK, they are all going through tough times, so you maybe able to negotiate a great deal especially if you are a cash buyer, don't expect fantastic growth.

Great Britain as an island is overcrowded with not enough houses or flats being built, this could be one reason why us Brits are leaving in the first place, other countries do not have this problem so house prices remain static as mentioned earlier with the credit crunch, prices can drop relatively quickly. So if you do consider this as an option to making a quick kill, think again as it is going to take a long time to get over this downturn.

We have come to the end, just to wrap this up, planning is everything, research is paramount, don't leave any stone unturned, you have worked all your life for this day, it's been a hard slog, with this in mind, it's not as bad as it sounds, it may seem complicated but not that bad if you are willing to do a little bit of work before the big day. Now it's your turn, decide on what where and why, get on with it as this is your time now, enjoy and have a great retirement.


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Just Life Insurance specialise in over 50's life insurance, and their website provides free life insurance advice resources and articles, as well as an online quote service to provide the best life insurance quotes.

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