Spain is top country for Brits wanting to retire abroad, survey reveals

by Ray Clancy on August 4, 2010

Spain is the favourite country for British people retiring abroad but those lucky enough to fulfill their dream of doing so might not be as well off as if they stayed at home, a new study shows.

France is the second favourite place for retiring expats followed by the US, Canada and Ireland, the survey from Standard Life reveals.

The company though warns those looking to retire abroad that the UK state pension might not rise in the future so those staying in the UK might enjoy double the level of state pension after 20 years.

Andrew Tully, senior pensions policy manager at Standard Life points out that if an individual moves abroad permanently any increases in their UK state pension will only apply if they are living in an European Union country or a country with a reciprocal social security agreement with the UK.

Where the individual is living outside these countries, the amount of UK state pension they will receive each year is frozen at the amount initially paid when first claimed or if the pensioner emigrated more than one year after payment began, at the rate in force when emigrating.  Popular retirement countries outside these reciprocal agreements include Australia, Canada, New Zealand and South Africa.

‘Retiring abroad is a dream for many people but without careful planning and advice, things can potentially go wrong very quickly. One significant consideration before you move is to think about your state pension and what, if any, reciprocal agreement is in place,’ Tully said.

‘If there isn’t a reciprocal agreement in place then you need to be very careful your retirement income is sufficient to cover your living costs over a long period of time.  Over a 20 year retirement, your basic state UK pension could halve in real terms if a reciprocal arrangement is not in place,’ he explained.

His top tips before moving abroad include seeking independent financial advice before making plans about future pension provision or transferring your pension overseas and checking what reciprocal basic state pension agreements are in place with the destination country, if any. This can be done through the Department for Work and Pensions.

You should also inform your social security office, HM Revenue and Customs, and the Department for Work and Pensions when you move and provide your contact details abroad.

You can get a forecast of your state pension by completing a BR19 form or if already overseas, complete form CA3638 or call The International Pensions Centre on 0191 218 7777.

It is also worth checking your state pension age (SPA). For women, the SPA is rising from 60 to 65 between 2010 and 2020, with further rises to 68 currently expected to take place by 2048, although the coalition government may accelerate these changes.

Other tips included finding out about welfare rights abroad as some UK benefits are not payable outside the UK, others apply only in the EU or in countries that have agreements with the UK.

And tell your bank, building society and any other financial institution that you have a policy or agreement with them and are moving abroad and find out more about healthcare costs in the country you want to move to.

{ 3 comments… read them below or add one }

J.Loppy August 16, 2010 at 2:19 pm

I don’t understand how the British government is allowed to withhold pension increases to British Citizens who have payed all their NI contributions. Can anyone explain what country requires an agreement with Britain to allow the government to pay a British pensioner his/her pension while being a permanent resident abroad?

Is this some kind of mad British law that some wierd individual made up to reduce pension costs? Why does the British government who are put in place by the people for the people continue to maintain this legislation?


Jaques October 6, 2010 at 9:28 am

The Brits have been invading Spain for years but recently have been leavigng in droves over health and pension issues, Spain being chosen certainly takes some pressure off the french …Having been made to look like Auschwitz in some areas through concrete monstrosities (over) built to cash in on British investors in places with inadequte service Brits have favored the Spaniards with their presence….the richer ones sometimes dictating to the locals about how their architecture shall be and bad luck about your traditions and requirements . You drive through lovely countryside and suddenly see the Brit equivalent of Sin Sing sticking up and befouling the once beautiful landscape.
Yesp, you can really see the british influence. Again a whole range of uneducated deadbeats leaped in to becoem "real estate agents". Anyway these charming places become far less charming once choc abloc with "cor blimey"s and "I say old chaps". My own wiggensian opinion ??..daft I call it!!"


Jaques October 6, 2010 at 9:34 am

"Can anyone explain what country requires an agreement with Britain to allow the government to pay a British pensioner his/her pension while being a permanent resident abroad?


Funny about this but they like to see money staying in the country, ebven though the deRosthcild Central Bankers control virtually the whole world and own all its currency so they profit wherever it is sent and spent …..printing more baseless money to fill the Brit based Bank of England de Rothschild has owned since Waterloo sees a currency slowdown which doesn't suit them after all Englands pseudo membership of the Eu ddn't include investing in the euro..equality and accountability is not something the lower orders of Europe should demand from the Imperial soccer booted master race.


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