Spain is the most popular country for British retirees

by Ray Clancy on July 2, 2013

Spain is the most popular country for British retirees

Spain is the most popular country for British retirees

Spain is the most popular overseas retirement destination for British people followed by France and Australia, new research shows. Despite the country’s weak economy the sunshine and the sangria is still a big draw. Ireland is the fourth most popular retirement destination and Cyprus and the United States are equal in fifth place.

Canada is less popular and this could be because the UK state pension is now worth 42% less for someone who retired to Canada in 2003 compared to someone who retired in the US, receiving £6,726 less state pension income over the 10 year period, according to the research from retirement income specialist MGM Advantage. ‘Retiring abroad is an aspiration for many people. Thoughts of better weather, cheaper living costs and potentially cheaper property than the UK can prove a strong draw,’ said Andrew Tully of MGM Advantage.

‘But, without the right planning 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 could find your UK state pension frozen at the point of retirement if the country you choose to retire to does not have a reciprocal agreement in place with the UK. 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. Many retirees have found this has hit them hard,’ he explained.

Quote from ExpatForum.com : “What’s your favorite place in Spain to visit?”

‘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 the world of difference between the retirement of your dreams or an altogether more challenging experience,’ he added.

The firm offers a number of basic tips for British retiring abroad. They should tell HM Revenue and Customs that they are moving overseas so that any UK pension you have is paid gross (no tax deducted) and taxed in your country of residence if the country you live in has a double taxation agreement with the UK. People should also check what reciprocal agreements are in place with the destination country regarding the UK state pension and other social security benefits and find out about their welfare rights while abroad.

It is also worth keeping an eye on exchange rates and checking the cost of healthcare in the country you are moving to, considering some form of medical insurance and doing research on the cost of living.

If you decide to keep your property in the UK you will need to let your mortgage provider and insurance company know if it will be rented or remain empty. People should notify utility companies, financial institutions and local councils when leaving as well as the electoral register and the Post Office to arrange for mail forwarding.

{ 1 comment… read it below or add one }

Jane Davies July 2, 2013 at 3:50 pm

No reciprocal agreements are needed to give the frozen 4% their right to be treated without discrimination. This is a lie used until recently by the DWP. They have had to stop saying this as it has been proved untrue by the Canadian finance minister and other governments in the frozen countries. In repeating this myth you are unwittingly letting the UK government off the hook as they used to try to blame the frozen countries for not having agreements. This is blatant discrimination and the UK government alone is responsible for this injustice and can end it with just the will of ministers to do the right thing.

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