Over six million British adults are planning to retire abroad and most of them want to move to Spain, which is the nation’s top foreign retirement destination.
New research reveals that Spain is still the most popular place for Brits to retire, with 26% opting for the country. In second place is France, with the United States in third.
In total, over 6,000,000 British people are planning to retire abroad, with an even split between Europe and the rest of the world, according to the research by retirement income specialist MGM.
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 are planning to retire outside Europe with the US the most popular destination with 16% of votes, followed by Australia with 14% and the Far East with 13%.
“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,” said Andrew Tully of MGM Advantage.
“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,” he pointed out.
“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,” he warned.
For example, if you retired to Canada 10 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.
“To help navigate the complexities of retiring abroad, it is vital people seek professional financial advice. There are a number of firms who specialise in providing advice to budding expats, which could make a world of difference between the retirement of your dreams or an altogether more challenging experience,” added Tully.