British expats worried their pensions are not enough to maintain desired lifestyle

by Ray Clancy on May 7, 2013

British expats worried their pensions are not enough to maintain desired lifestyle

British expats worried their pensions are not enough to maintain desired lifestyle

A growing number of British expats who have retired believe that their pension is not enough to support their desired lifestyle, research suggests. Most UK expats who are still working also realise they will have to cut spending substantially when they reach retirement, according to a survey by Lloyds TSB International.

Older UK expats who are living abroad are facing a serious pension gap squeeze and the number of retired expats who think their pension income is enough to sustain their desired lifestyle is just 30%. Over half, some 52%, of expats who are still in work realise that when they reach retirement age, they will have to cut their spending significantly in order to make ends meet. Many retired expats are still planning to stay living abroad, despite the squeeze on pension incomes.

According to 47% of respondents, this is because they believe their pension income will go further if they continue living outside of the UK. The number of people who think that their financial situation will be better living in the UK is just 18%, according to the research. The high cost of living in the UK appears to be one of the key reasons for this way of thinking as only 26% of those included in the survey said that they would have lower living costs in the UK compared to their new country of residence.

Quote from : “I heard from a friend in the UK that when it comes time to apply for the British pension I might not be able to receive one since I have been living in the USA for the past 15 years. Curious to find out if there is any truth in this statement.”

Many retired UK expats are also worried about currency fluctuations, with 50% expressing concern that exchange rates may affect their pension income at some time. ‘A growing pension gap is a real worry for many expats, some of whom will have to significantly scale back the lifestyle they have been used to. These worries have been particularly compounded for retired expats who draw a UK pension income, but spend in their local currency, as it means they are running a currency risk on perhaps all of their income,’ said Lloyds TSB International associate director Emiko Caerlewy-Smith.

‘An alternative approach could be for expats to transfer their UK pension into the currency of the country in which they have retired to, or plan to retire to, thus eliminating exposure to foreign exchange fluctuations,’ he explained. ‘Various international pension arrangements exist to serve the needs of British nationals working or retiring abroad. Your pension can be one of your greatest lifetime assets so we would always suggest customers seek professional financial advice in this area,’ he added.

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