UK expats prefer to retire abroad rather than return to the country of their birth as the cost of retirement is perceived as being too high in Britain. There is a feeling among expats that they need a minimum wealth level of £400,000 to retire comfortably, according to a recent study by Isle of Man based Alliance & Leicester International.
It found that only 13% of UK expats intend to retire in Britain. But although the majority say they will remain abroad they don't want to be too far away from UK based family and friends. Some 57% said that their intention is to retire in Europe. Indeed, 10% of expats cited being away from family and friends as a major barrier to retiring outside the UK. Some 5% named Thailand as their preferred retirement location, 4% opting for the US and 3% for New Zealand.
The survey also showed that expats intend to fund their retirement through a variety of methods. Some 27% said it would be savings, 23% said their UK State Pension and private pensions were mentioned by 20%. Property is also a big source of retirement funding for expats with 6% relying on rental income, 6% intending to sell a residential investment and 2% planning to take out an equity release plan.
When considering the key factors that contribute to their chosen retirement destination, a better quality of life was voted top, 21%, better weather came second, 20%, and value for money third at 14%.
However the expats, who intend to retire abroad, do have some concerns about retiring in another country. The quality of medical facilities and dealing with general medical issues, potentially in a foreign language, was the biggest worry for 22% of expats. Finances were also a concern with 13% worrying about exchange rates and 12% concerned about having sufficient money to survive. Frailty was more of a concern for women with 14% of women citing this as a worry compared to just 10% of men.
'It is interesting to see that many UK expats have settled in their new home, with 87% of UK expats intending to retire abroad. However, while some expats might prefer life outside the UK, they are still very attached to friends and family thus settling in European destinations that are only a low cost flight away,' said Lynette Byrne, Head of Marketing at Alliance & Leicester International.
'This research really highlights the international nature of society today and raises some interesting questions as to how people are going to manage their finances and protect their savings against interest rate fluctuations,' she added.