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How to leave England and retire abroad

One in twelve Brits choose to retire abroad. Warmer climes, a better quality of life and cheaper living are all reasons why many of us migrate to hotspots like Spain, Portugal and the South of France once retirement beckons.

Source: Flickr Robert S. Donovan

It’s also a ripe opportunity to reap the rewards of your working life and see your hard earned money go further than it might in the UK. And with the ease and affordability of air travel you can still travel back to the UK – or receive family and friends in your new home – frequently and affordably.

But what about our savings?

You’ve saved hard for this move and the last thing you want is to see that capital zapped by unpredictable foreign exchange rates and steep transfer fees. Book an appointment with your High Street bank’s wealth manager to discuss financial planning options for expats, including advice on purchasing a property abroad.

Opening an account with a trusted foreign exchange trader like FOREX will ensure that you’re getting the most out of your money once abroad. Foreign exchange traders make their living offering better currency exchange rates than the bank - often fixed rates - and have access to deeper insights into exchange rate movements and the best time to move your money.

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Will retiring abroad affect my pension?

The good news is that you can continue to receive your state pension in any country the world over, and private pension schemes should follow suit in this matter – though always check. If you decide to relocate to a country outside of the EEA (European Economic Area), however, your payments will be frozen at your initial pension rate in the UK.

In the case of both private and state pensions, you must notify the Department for Work and Pensions and / or your private pension provider of your intention to move, and remember that the local exchange rate may affect what you eventually receive. Transferring your pensions to a QROPS (Qualifying Recognised Overseas Pension Scheme) is a sensible option which will ensure that the tax you pay on income and capital received from your QROPS will be determined by the taxation of the country you have retired to and live in, which is often a better deal than pensioners in the UK will be getting.

So how do I find a property overseas?

Much the same as looking for a new home in the UK, websites like Right Move are a great place to start getting a feel for the property market in your chosen country. The majority of the properties in Right Move’s overseas section are in France and Spain – both very popular expat retirement destinations.

Make an appointment with your overseas property advisor at your bank and talk over your options. They’ll be able to bring you up to speed on everything from legal fees to country-specific customs. In Portugal, for example, it’s customary to pay around a third of the purchase price up front. Many people retiring abroad will still need a mortgage of some description.

Interest rates for overseas properties tend to be better than for UK properties, and your advisor will be able to help you decide whether to borrow in sterling or local currency. The latter will, of course, ensure better stability in your repayments as there’s no exchange rate to worry about.