By David Fuller
A new survey reveals that EU countries remain the most sought-after locations for Brits to retire to, in spite of Brexit.
Research conducted by Retirement Advantage found that one in ten British people aged over 50 are considering retiring abroad, with Spain the destination of choice for the majority.
In fact, European countries dominated the choice of most popular retirement destinations, with France, Portugal, Italy and South-East Europe all finishing ahead of the first non-European location featured the list, which was the Far East. However, America, New Zealand and Australia were the next highest ranked countries.
One reason that European countries are placed so highly is arguably because they are currently deemed easier to retire to than those based outside the EU. Even with Brexit on the horizon, it seems that Brits are hopeful they will still be able to spend their twilight years in the sun.
While Andrew Tully, the pensions technical director at Retirement Advantage, was keen to highlight the many advantages of retiring abroad – including cheaper living costs, better weather and improved quality of life – he was equally quick to warn of the dangers of not getting your finances sorted first.
“If you retire to some countries, you will not be eligible for increases in the state pension, which currently rises by the higher of inflation, earnings or 2.5 per cent, under the 'triple lock' mechanism,” he explained. “Countries in the EU, as well as many others, have ‘reciprocal arrangements’ with the UK, meaning your state pension will increase each year. However, other countries including Australia, Canada and New Zealand do not, which means the state pension will not increase once you move overseas.”
He also pointed out that there are currently no guarantees that retirees within the EU will continue to receive state pension increases after Brexit.
Another financial concern highlighted by Tully, and one that you will no doubt already aware of, is the issue of how currency fluctuations can affect you. “To help navigate the complexities of retiring abroad, especially given the uncertainties from Brexit, it is vital people seek professional financial advice,” Tully advised. “There are a number of companies able to help budding expats, and receiving the right advice could make the difference between making a retirement dream a reality or a nightmare.”
Find out more about retiring to Spain, France, or anywhere in and out of the EU, with our free guides.
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