For UK Expat: The Three Major Factors You have to Think about if You Choose to Retire Abroad

Choosing to retire abroad has now become a definite option for many, and it’s a decision that can have a tremendous impact on your life. If you are approaching senior age or are already a senior planning your retirement, you could well benefit from living in a different country when you get older. The UK is a beautiful country, of course, but if you feel an attraction for warmer climates and a different kind of scenery and lifestyle, then living in another country when you retire may well be a brilliant option for you. But before you take that leap, there are some factors you will have to think about. Aside from thinking about the cost of retiring overseas, the healthcare options, the lifestyle and standard of living, and, of course, the best location, it pays to think about some other crucial factors. So, what are these factors? Here’s what you have to consider how much you need to retire in Italy.

• Pension

If you are planning to live overseas when you retire, there shouldn’t be too much of an issue receiving your pension in your desired country. The pension can be directly paid to your UK bank account, or you can choose to have it paid to a local bank account in the country where you live. Also, if the country is in the EEA or if it has an agreement when it comes to social security with the UK, your pension will increase based on increases in pensions in the UK. You have the choice to receive your pension every four weeks or have it paid every 13 weeks. You can also benefit from a private pension, and there are now tailor-made pensions that can be specifically designed according to your needs as well. Bear in mind, though, that the tax on your pension will be based on which country you are residing in, but there are certain ways through which you can also minimize your pension taxes. For instance, in Portugal, you can avail of the non-habitual resident tax scheme, which allows you to receive your UK pension without taxes. You may want to seek independent advice on how to minimize your taxes as well. 

• Property 

Many of us have dreams of retiring in an attractive property in places like Spain, France, and Portugal. And there’s also no denying the fact that you will feel more secure if you own property in the area where you are retiring. But you should give serious thought to whether you would be better off renting or buying since property markets in various European countries have suffered significant falls and continue to suffer from over-supply. Of course, if you want to live permanently in your new home, this won’t be a problem, but if you decide to leave in the future, this could be a potential issue. If you rent, you can have better flexibility, of course, but long-term rental can also be a challenge to find in some areas. It pays to do relevant research as much as you can and take several trips to the area to orient yourself more fully with the property market.

• Inheritance 

Another significant factor to think about is the issue of inheritance, especially in terms of rules and taxes. For instance, in Italy, Spain, and France, there are specific rules regarding leaving property which is different from those in the UK. France, in particular, favors the claim of children, which remains indisputable. Also, if you are still considered domiciled in the UK, you may be obligated to pay inheritance tax. Just make sure to take account of the various rules and rates concerning inheritance in the country where you want to live and be aware of your choices in both legal and tax terms so you can handle issues and come up with prospective solutions even before you move.