Spain is the No1 destinations Britons would like to retire to.
Being unable to travel freely today has motivated future retirees to travel more in later life – with 46% of those surveyed deciding to spend their golden years abroad within the past five years.
LONDON – New research from leading online pension provider, PensionBee, uncovers the nation’s international retirement ambitions, delving into the motivations and fears of aspiring expats.
Surveying UK citizens who plan to retire abroad, PensionBee reveals almost half (47%) of respondents feel inspired to retire overseas in the future as a result of the introduction of COVID-19 travel restrictions. Being unable to travel freely today has motivated future retirees to travel more in later life – with 46% of those surveyed deciding to spend their golden years abroad within the past five years.
For the majority of respondents, the most popular motivation for retiring overseas is to have a better standard of living (65%) and to experience a different culture and country (65%). Other factors include better weather (64%), property being more affordable (55%), lower taxes (35%) and better healthcare services (31%).
Yet, despite strong motivations behind retiring abroad, concerns around accessing pension savings when overseas appear to be widespread. Each generation has been left with some doubts, but none more than Millennials (24-40-year-olds). Three-quarters (75%) of this generation fear they won’t be able to access their retirement funds in another country without incurring extra fees or delays – 72% of Generation X (41-54-year-olds) and 65% of Generation Z (18-23-year-olds) also share the same worries.
Due to these concerns, the majority of aspiring expats (66%) reported that they have saved or will save more towards their pension pot as a result of wanting to retire abroad. Unsurprisingly, the generation closest to retirement has the largest value savings pot, with almost the same amount of savings (£39,595) as Generation Z (£18,918) and Millennials (£25,227) combined. However, there are some notable variations across the nation. At opposite ends of the spectrum, 12% of respondents said they didn’t have anything saved towards their retirement overseas, whereas another 12% had between £80,001 – £100,000 put aside – more than double the average pension pot across each generation.
While putting together a strict saving plan (50%), increasing workplace pension contributions (51%) and investing (54%) remain some of the most popular ways for people to save for their retirement abroad, some generations are opting for more creative methods.
Just under half (49%) of Generation Z are operating a side hustle or a second job to help fund their retirement overseas. In contrast, over half of Millennials (52%) revealed they have already begun cutting out small expenses to help save for their dreams of retiring abroad.
Romi Savova, CEO at PensionBee, commented: “Moving abroad and managing a UK personal or workplace pension can seem like a daunting prospect, so it’s encouraging to see that future expats are already thinking about how they need to prepare financially. Circumstances such as pension drawdown fees, fluctuations in exchange rates and living in a post-Brexit world perpetuate the need for savers to thoroughly research their dream retirement destination before making any firm decisions. This can help ease concerns around the cost of living abroad and the accessibility of a UK pension once a saver has started their retirement outside the UK.”
PensionBee’s top tips for looking after your pension if you plan to move abroad:
- Will your defined contribution pension be affected? – Those with a defined contribution pension can continue to have their savings managed by a UK pension provider. It may not always be possible to transfer your pension abroad and it’s important to check eligibility to avoid heavy tax penalties upon transfer.
- Can you claim your UK pension if you live abroad? – UK pension providers won’t usually let savers draw down into an overseas bank account. For the few providers who will agree to pay directly into an overseas account, there are often fees associated with doing so. If a saver has a bank account in the UK, they’ll be able to draw down into this. However, they’ll likely face transfer fees and exchange rates, so it would be worth investigating low-cost overseas transfer services.
- Will you qualify for tax relief if you live abroad? – Savers that are still paying into a UK-based pension from overseas will only qualify for tax relief if they've lived and paid taxes in the UK during that tax year, or are classed as a ‘Relevant UK Individual’ for tax purposes. They may only receive tax relief on contributions up to £3,600 gross unless they have relevant UK earnings within the tax year.
- Can you claim your State Pension if you move abroad? – Savers can receive their UK State Pension if they move abroad. This works in the same way as in the UK and can be paid into a UK or international bank account. If you live outside the UK and are paying into an overseas bank account, the State Pension will be paid in the local currency, so the amount received is dependent on the exchange rates at the time.
Methodology
PensionBee surveyed over 1,000 UK adults who are planning to retire overseas. PensionBee asked respondents which country they plan to retire in, how much they have saved for retirement and how, in addition to their concerns, if any, around accessing their pension abroad.
Top ten destinations Britons would like to retire to
|
Rank |
Country |
% of aspiring expats who said they’d like to retire here |
|
1 |
Spain |
34% |
|
2 |
France |
17% |
|
3 |
USA |
15% |
|
4 |
Italy |
13% |
|
5 |
Greece |
11% |
|
6 |
Portugal |
10% |
|
7 |
Canada |
8% |
|
8 |
Dubai |
7% |
|
9 |
Cyprus |
7% |
|
10 |
Australia |
7% |
Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.
She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
