If you are thinking of retiring abroad, did you know that while the UK full basic state pension for a single person was worth £79.60 in 2004 and in 2014 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 increased as normal. If there is no such no agreement however, and that includes Australia and Canada, your state pension will be frozen and won’t increase year-on-year!
After research into where people retiring in the UK would choose to live abroad, MGM Advantage has suggested tips on their website about what to check before you make a decision on where to move to. The tips include:
1. Get an estimate of your state pension.
2. Seek independent financial advice before you move.
3. Tell HM Revenue and Customs that you are moving overseas. This allows them to let you know of any UK tax liability you may have even though you are living overseas. More importantly, it allows any UK pension you have to be paid gross (no tax deducted) and taxed in your country of residence – if the country you live in has a double taxation agreement with the UK.
4. Check what reciprocal agreements are in place with the destination country regarding your UK state pension and other social security benefits.
5. Find out about your welfare rights while abroad.
6. Keep an eye on exchange rates.
7. Check the cost of healthcare in the country you are thinking of moving to, and consider some form of medical insurance.
8. If you decide to keep your property in the UK you will need to let your mortgage provider and insurance company know if it will be rented or remain empty.
9. Do your homework on the cost of living in the country you want to move to.
10. Notify utility companies, financial institutions and your local council when you are leaving.
11. Contact the electoral register, and arrange for mail forwarding via the Post Office.
These steps are of course just the start of any move abroad. For many people, there will be more complex financial arrangements to consider, depending on the country you are moving to. Private pensions and investments, for example, will need to be considered, either from a taxation point of view, or an accessibility point of view.
Both of these elements will also need to be factored into your financial planning. If part of your financial plan for your retirement involves accessing assets that are currently invested, then you will need to check the logistics of this and the tax that will be due upon receiving the funds held in the investment, either at home or abroad. Ensuring your move is considered in your financial planning is vital to helping you to build a new life abroad and to ensuring it is the lifestyle you have always wanted, during your dream move.Posted In : Expatriate, Emigration, Tips