, last updated - Retirement Planning

How will retiring abroad affect your pension?


Retiring abroad

If you’re approaching retirement age, the chances are you’ve spent a good few months thinking about how you’ll spend the upcoming years. You may plan to travel, take up a new hobby, spend more time with family or even take on another type of job. For many people, however, the lure of hot weather and cheaper living costs are simply too much to resist. So why not retire abroad?

With numerous opportunities for expats, many people choose to move abroad when they retire, or earlier if they’re able to do so. Indeed, the availability of low-cost flights means that many people move overseas and commute to work in the UK on a weekly basis.

If you’re considering a move abroad, however, it’s important to consider the impact it could have on your finances. Whilst you may have made savvy investments or taken advantage of savings plans in the UK, you’ll need to establish the best way of transferring or accessing your funds when you’re an expat in another country.

Managing your pension if you’re emigrating

Fortunately, British expats can claim their state pension from anywhere in the world. However, moving to some countries means that the amount you receive will be frozen, rather than index-linked.

When it comes to private or occupational pensions, though, you may need to access financial advice. If you plan on moving abroad permanently and living there full-time, it’s likely that you’ll be a resident of your new home country and this will affect your finances.

If you’ll be moving, coming backwards and forwards to the UK or maintaining a home in the United Kingdom, however, you may need to deal with cross-border financial regulations and the issue of double taxation treaties.

Moving backwards and forwards to the UK or maintaining a home in the United Kingdom can form a different situation. You may need to deal with cross-border financial regulations and the issue of double taxation treaties.

Can your pension be transferred?

A UK pension transfer can be an ideal way for you to manage your funds and opting for a Qualifying Recognised Overseas Pension Scheme, or QROPS, can even result in you receiving tax benefits.

Whilst many countries offer QROPS to UK expats, some charge a significant amount to complete the transfer. If you’re emigrating to outside the European Economic Area, you may be subject to a 25% charge when transferring your pension.

Due to this, it’s vital to seek specialised expat financial advice before committing to your move. With your finances likely to affect every aspect of your future, it’s essential to seek help as early as possible.

To find out more about the financial implications of moving abroad, why not contact us today? 

The information contained herein is for informational purposes only which is subject to change and should not be relied upon. You should seek advice from a professional adviser before embarking on any financial planning activity.

Related Posts

When should I use a QROPS?

Posted by Jack Camille - ACSI | Feb 21, 2022

What Is The Difference Between A Defined Benefit and Defined Contribution Pension?

IRAs for US Non-Residents - Account being Closed

Posted by Ryan Frost | Oct 14, 2021

As an American expat, why is my IRA being closed?

One of our expert financial advisers will aim to get back to you within 12-24 hours.