When I was working in the UK, I met many people who hoped to retire abroad. See, the UK is lovely but if you like a warm weather and a low cost of living, it may not be the first destination on your list.
With this post I want to share a few tips for anyone considering leaving the UK to retire abroad.
Get your tax situation in order
Make sure you tell HMRC that you are leaving. There is a special tax regimen for people who are not full time residents (i.e. who spend less than 6 months per year in the UK), especially if you are renting your house or still have rental properties.
Automate as much as possible
Remember to scan all your important documents, and your online log in details for banking, utilities, council tax and the Government Gateway. Most services will accept to resend your password only via mail and that can prove complicated.
Set up Direct Debits for your Council tax, and any other bills that you will still be paying while living abroad.
Consider double banking
I still have a UK credit card that charges me no commission on cash withdrawals abroad, but having a local bank account is very useful in order to set up bills and utilities payments, and wire money from the UK. Your current bank may have a network in your future country of residence, and can help you open a bank account before arriving. The benefits of an offshore bank are also worth considering.
Have your mail follow you
There is a forward postal service that allows you to receive your mail and magazines at your new address, check the details with your post office.
SORN your car
If you are not going to use your car, you can contact DVLA and fill a form of Statutory Of Road Notification. You will not have to pay for your tax disc or MOT, but won’t be able to use your car if you come back for Christmas.
Get a health checkup
The last thing you want is a medical emergency a few weeks into your new life under the sun. Arrange for a GP appointment a few months before you go, so you have time to follow up if needed. Ask for a 6 or 12 months prescription, and the generic name of your medicines, so you can easily refill abroad.
Find health insurance
Depending of your country of retirement, the health system might be amazing, or non existent. Get a few quotes to compare coverage, both in the UK and in your new country. As I now live in a cheap country, I chose to go without health insurance, and pay for my healthcare as I go. My credit card also covers me for big emergencies. If you are retiring in your 60s, then insurance is a must. Some companies will also cover your spouse to come back to the UK with you in case of a medical emergency.
Get financial advice
This is certainly the most important point. You want to make sure that you can enjoy as much of your hard earned savings and your pension. Talk to an adviser, and apply for an offshore bank account if that minimizes your tax burden. Set up your goals, do you want to plan life at your new destination, optimize your taxes, or make sure your loved ones will receive an inheritance? With proper advice, you will be able to have a clear picture of your financial future.
Bring your pension with you
HM Revenue and Customs has a scheme called QROPS, the Qualifying Recognized Overseas Pension Scheme, that allows non-UK residents to transfer their private pensions abroad. I looked into it when I started working there because my employer had a contribution match, and I would have been able to bring my pension back to France once I stopped working. During the first five years of moving your pension abroad, you will need to fill a self assessment return at the end of the tax year to HMRC, and then you will be free to enjoy your nest egg in your new country. Note that you can only transfer your private or corporate pension, not your state pension.
The main advantage of transferring your pension abroad is that you will be subject to your new country’s tax system, where tax brackets can be much lower. Having your pension in the currency of your country of residence can also bring you the safety of knowing what amount to expect and not depend on currency rates.
Are you considering a retirement under the sun? What are your tips to make your dreams a reality?
This post was featured on the Canadian Budget Binder, thank you!
Latest posts by Pauline (Posts)
- Selling the Old, Buying the New: Creative Financing for UK Homeowners - April 13, 2015
- 10 ways to Get Fit Without Going to the Gym - April 13, 2015
- Frequent Flyer Miles Booking Service - April 8, 2015
- Start Your Own Business: A Financial Guide - April 2, 2015
- Going to a Secret Paradise on a Budget - April 1, 2015