How to retire abroad
Tips to help you plan
Whether you’re moving abroad to be closer to friends and family, to experience a different culture, or just for a better quality of life, planning ahead is key.
Here are some tips to help you avoid expensive healthcare fees, unnecessary tax charges and high currency exchange costs.
Find out how to access your pension
After working hard to save and build your pension you’ll want to make sure you can access your money easily from abroad.
If you have an occupational or personal pension, it’s usually paid into your UK bank account. This could also be the case if you choose to move your pension into drawdown or exchange it for an annuity. You should check this with your pension provider first.
If you’re eligible to receive the State Pension, it’s possible to have this paid directly to a bank account abroad. Currently, the State Pension increases each year by the greater of the increase in earnings, inflation or 2.5%. But you’re not entitled to the annual increase in every country, so you should also check this before you move.
Countries where you’ll usually get an annual increase in the State Pension are listed here.
Option to transfer
You might also have the option to transfer your UK pension to a Qualified Recognised Overseas Pension Scheme (QROPS).
Transferring could give you more control but there are various tax and regulatory implications that you might want to consider. Please also check you won’t lose valuable guarantees, benefits or have to pay excessive exit fees.
Understand how your income will be taxed
Even when you move abroad, you might still be liable for UK tax and you should tell HMRC if you’re leaving the UK to live abroad permanently.
As well as paying tax in the UK, there may be tax implications in the country where you choose to retire. If that country has a double taxation agreement with the UK, you may be able to claim tax relief or a tax refund to avoid paying tax twice.
Some tax-free investments available in the UK could also be affected when you move abroad.
Tax rules can change and the benefits depend on your circumstances.
Save on currency transfers
You should pay close attention to transfer fees and the exchange rate offered by any provider you choose to use. Many people use their bank when exchanging currencies and sending money abroad, but our research shows this could leave you out of pocket.
As well as providing competitive exchange rates with no transfer fees, our currency service can typically offer more sophisticated services than high street banks. These include fixing an exchange rate for the future and helping you to benefit from improved exchange rates as they rise.
So whether you’re looking to send money abroad monthly, or in larger lump sums, we’ll help your money go further.
The Hargreaves Lansdown Currency Service is provided by Currencies Direct Ltd.
Look out for expensive healthcare fees
You should look carefully at the level of medical care available in the country you’re looking to retire to.
In the UK we’re fortunate to enjoy free healthcare from the NHS, but this isn’t always the case in other countries. You might want to ask yourself some questions, such as:
- Which medical treatments are free and which will I need to pay for?
- Will I need medical insurance too?
- What’s the quality of healthcare available?