Spain still tops the list of favourite overseas destination for British retirees despite its economic woes and poor property market.
The country tips the latest poll from retirement income specialist MGM followed by France, Australia, Ireland and Cyprus.
‘Retiring abroad is a dream for many people. The thought of an easier pace of living, better weather and potentially cheaper property than the UK can prove a strong draw,’ said Andrew Tully, pensions technical director at MGM Advantage.
‘But without the right planning and advice you can quickly get caught out by the local tax laws. And that is before you look at your pension and other financial arrangements,’ he added.
The firm’s general advice includes remembering to ask HM Revenue and Customs for information about any UK tax liability you may have even though you are living overseas and to check what reciprocal agreements are in place with the destination country regarding your UK state pension.
It also says people should find out about your welfare rights while abroad, check the cost of healthcare in the country you are thinking of moving to and do your homework on the cost of living.
It also reminds people that if they decide to keep their property in the UK they will need to let their mortgage provider and insurance company know if it will be rented or remain empty.
You also need to notify utility companies, financial institutions and your local council when you are leaving and contact the electoral register, and arrange for mail forwarding via the Post Office.
‘One often overlooked aspect of retiring abroad is what happens to your UK state pension. 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,’ explained Tully.
‘However where there is no agreement in place, and that includes Australia and Canada, your state pension will be frozen and won’t increase,’ he pointed out.
‘It is vital you seek professional financial advice well in advance of making the move. There are a number of firms who specialise in providing advice to expats, which could make the world of difference between the retirement of your dreams or an experience altogether more challenging,’ he added.