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retiring abroad

As Autumn brings with it grey skies, rain and chilly winds, many approaching retirement age will dream about retiring abroad, where the morning commute is nothing but a distant memory.

Nevertheless, whilst a villa in Italy might bring with it guaranteed sunshine, unfortunately taxes and the need for a regular income do not disappear. There are many things to consider before retiring abroad.

Edward Hardy from World First talks us through some aspects to consider before upping sticks for your retirement.

Location, Location, Location

If you haven’t got your heart set on a particular part of the world to retire to, it’s worth doing your research and finding a location that suits your needs. The obvious ones like climate, language spoken, crime, ease of access might be easy to find out with a quick Google search, but it is also worth looking at what visa requirements you may need, as well as if a present expat community exists.

Whilst UK residents enjoyed easy access to the continent under the EU’s free movement rules, Brexit may affect British citizens retiring abroad in the future. It’s worth getting advice on what your options are and what the settlement criteria is.

Other things to think about before settling on a location is local culture and infrastructure available including health care, transport, and amenities available.

Cost of living

Once you’ve sussed out your dream location, it is worth thinking about the costs of maintaining your ideal lifestyle. Factor in costs of healthcare, transportation, food, drink and entertainment and create a realistic budget for yourself. The reality and costs of daily life at your dream location will be very different to any expectations built from holidays.

You should spend an extended time in some rented accommodation before retiring abroad so you have a realistic idea of day-to-day spending. Also, research what you will need in terms of health insurance as well as factoring in any ongoing costs you may still have back in your home country e.g. mortgages.


You may still be liable to pay tax on income back in the UK even if you live abroad. Depending on where you choose to retire, you might also have to pay tax in your new home country and end up being taxed twice on the same income. The UK has negotiated Double Taxation Treaties with over 100 countries to avoid this happening but it is definitely worth doing your research on your tax requirements when moving.

Income from savings are generally taxable in your new home country and if you are making use of UK specific tax free vehicles like ISAs and NS&I, then you should most likely expect tax on any income from these. Again, it is strongly advised you research if there are local tax-free equivalents for example, the Livrets A account in France.


Again, location is important in determining how your state pension may be affected when retiring abroad. Whilst you can claim a UK state pension no matter where you live, where you live could have a significant impact on how much you receive over time.

Until the UK formally exits the EU, retirees moving to one of the other 27 nation states will benefit from an agreement that means your state pension will rise with inflation. However, if you choose to retire further afield like Australia, New Zealand, Canada or South Africa, you are not able to benefit from state pension increases which could leave you out of pocket in the future.

With private pensions, factor in another cost and potential loss- transfers. Whilst state pensions can either be paid into a UK bank or directly into an overseas account in the local currency, cutting out transfer fees and bank charges, private pensions are normally only paid into your UK bank accounts. Transferring this over to a foreign bank account can be costly with many banks charging commission and fees on each transfer and may not give you the most favourable rates.  It is worth shopping around and looking at how currency brokers can help with transferring your private pension into your new home currency.

Work out how much you could have for retirement with our handy pension calculator:

Get the right advice

There are a wealth of new laws, customs and processes to get accustomed to once you’ve made the decision to move abroad for your retirement. The process of buying or renting a property might be completely different and you may also have to face completely different tax obligations. It is of utmost importance you get the right advice from a lawyer who can advise on tax obligations to a financial planner who can steer you in the right direction for any financial products or services you may need.

There is also a breadth of information tips from the Foreign and Commonwealth Office, HMRC, the Department for Work and Pensions and even the NHS on things to consider when retiring abroad including a moving abroad checklist with a handy guide and what to do and who to inform before your big move.

Finally, retiring abroad is a big decision for anyone but can be tremendously fulfilling once you’ve got your affairs in order. Make the most of your big move and get in touch with World First for any queries you have about currency transfers whether it’s buying a property abroad or repatriating your pension income.

Risk warning

As with all investing, your capital is at risk. The value of your portfolio with Nutmeg can go down as well as up and you may get back less than you invest. Pension rules apply and tax rules may change in future. If you need help with pensions, seek independent financial advice.

A stocks and shares ISA may not be right for everyone and tax rules may change in the future. If you are unsure if an ISA is the right choice for you, please seek independent financial advice.