A Guide to Retiring Abroad

Retiring abroad is a dream held by many people across the UK, with idealistic visions of their golden years spent sipping cocktails on the beach. Though it’s easy to see why retiring abroad is so popular amongst UK citizens, many are unaware of the immense planning involved.

From knowing the best retirement destinations to transferring pension payments overseas, there are many aspects to consider when looking to retire abroad. Thankfully, Halo Financial has put together this handy guide to cover all there is to know about retiring overseas.

3 piggy banks on top of a book. A blackboard on the background with retirement written in chalk. Retiring abroad concept.

How much money do I need to retire?

Knowing how much should be in your pension pot is one of the biggest concerns amongst those considering retirement. This figure could vary considerably between individuals depending on lifestyle and current annual income.

A study conducted by Which, surveying over 6,300 UK retirees, found that households spent around GBP 2,100 per month on average. This monthly spend adds up to around GBP 25,000 per year and estimated to cover retired couples who live an ‘essential’ lifestyle, i.e. limited spend on leisurely activities. For single-person households living an essential lifestyle, the annual figure is reduced to GBP 19,000.

For couples who Which consider living a ‘luxurious lifestyle,’ i.e. long-haul holidays and expensive meals out, it’s estimated that around GBP 40,000 a year would be required. For single-person households living a life of luxury, the annual figure is GBP 30,000.

When budgeting for retiring abroad, it’s essential to assess how much money you will have concerning:

  • Your state pension
  • Your private pension
  • Additional income from property or investments

State pension

National retirement age is currently 66 years old; for those who qualified to receive their state pension before 6th April 2016, the full weekly amount you will receive is GBP 134.25. This weekly amount adds up to GBP 6,981 a year.

For those who reach their state pension age after 6th April 2016, the full weekly amount is GBP 175.20.

It’s important to note that individuals may receive a higher or lower weekly amount than the full figure depending on your national insurance contributions. A full breakdown of the state pension rules is available on the UK government website.

What do I need to consider when retiring abroad?

To budget effectively for retiring abroad, retirees should know the full costs involved when living in a particular country. Some of the highest expenses when retiring abroad include:

  • Cost of buying a property in your desired location
  • Cost of selling or letting your UK property
  • Cost of transporting your personal belongings abroad
  • Cost of currency exchange
  • Cost of receiving financial advice
  • Cost of healthcare

In addition to finances, there are also some general points to be mindful of when retiring abroad:

  • What are the visa requirements?
  • What is the weather like throughout the year?
  • How is the local culture?
  • Will my new home be easily accessible for family and friends to visit?

image of a luxury home in Spain

Where are the best places to retire abroad in 2021?

Choosing the right place to retire abroad can be challenging to narrow down. The perfect place for you will primarily come down to budget and personal preferences. Some of the most popular overseas destinations for retirees include:


Spain is an incredibly popular destination, containing over 285,000 UK expats due to its beautiful weather and relatively low living costs. With flights only a few hours from the UK and high volumes of English speakers, it’s also a very convenient option for family or friends to visit. Popular locations to retire in Spain include Alicante, Marbella and Mallorca.


France is another popular destination amongst British retirees due to its convenience and stunning surroundings. Further benefits include its laid-back atmosphere and its excellent healthcare system. Some popular locations to retire in France include Lyon, Montpellier and Bordeaux.

Costa Rica

Costa Rica came out as number one in the 2021 Annual Global Retirement Index. Developing the nickname the ‘Switzerland of Central America’, Costa Rica is known for its safety, eco-friendliness and low cost of living. A particular compliment amongst expats is the locals’ friendly and welcoming nature.


If glorious weather is your priority when retiring abroad, Malta is known for having the most prolonged hours of sunshine each year in the whole of Europe. Being a dual-language country, everyone speaks English and is convenient for proximity to countries such as Italy and Tunisia.


Portugal continually tops the list in the Annual Global Retirement Index, coming in 5th place for 2021. There is something for everyone from small historical towns to vibrant sandy beaches. Popular places to retire in Portugal include The Algarve, Lisbon and Madeira.

What happens to my state pension if I move abroad?

Retirees can still claim their state pension if they retire abroad, providing that they have paid enough national insurance contributions. To make a claim, you must be within four months of your state pension age by contacting the International Pensions Centre or fill out an International State Pension Claim Form.

State pensions can be paid into either a UK bank account or an international bank account, but the latter could be subject to fees. If payments are made into a bank account overseas, you will be paid in the local currency, meaning that the amount could change due to fluctuating exchange rates.

How has COVID-19 impacted those looking to retire abroad?

The COVID-19 pandemic has halted many UK citizens’ plans in their quest to retire abroad. With rates of coronavirus infections still rising across many countries and UK travel restrictions currently in place, now is a challenging time to retire overseas.

With the global coronavirus situation still uncertain, it’s recommended that retirees hold back on their plans to move abroad until we have a clearer picture of the future. In the meantime, you still have the opportunity to plan and research to ensure that your move abroad is as smooth as possible when the time arises.

Can I retire in the EU after Brexit?

With freedom of movement between the UK and EU no longer in place, UK citizens are concerned that they would struggle to retire in the EU after Brexit. From 1st January 2021, UK citizens looking to retire in the EU will be required to obtain a visa. Visa and entry requirements will vary depending on your country of choice. Retirees can find a full list of entry requirements for each country on the UK government website.

One of the biggest concerns for retirees already living in the UK was that state pension benefits would not be payable post-Brexit. The UK government has confirmed that this is not the case and UK citizens who have retired in the EU pre and post-Brexit, will continue to receive state pension payments.

The pros and cons of retiring abroad

Whilst retiring abroad seems nothing but ideal from the outset, there are many advantages and disadvantages to consider to decipher if it is the right decision for you.

The pros of retiring abroad:

Lower costs of living

One of the key motivators for UK citizens wanting to retire abroad is that many can often live a better lifestyle for less money, such as affordable larger housing or better healthcare access.

Warm weather

Given the UK’s cold and rainy climate, it’s understandable why so many UK citizens are persuaded to retire abroad due to the prospect of permanent warm sunny weather.

Quality healthcare

Some popular expat destinations offer publicly funded healthcare systems, similar to the NHS. Whilst other countries such as France do not provide free healthcare, their system is globally recognised as providing a high-quality service.


With retirees no longer constrained by work commitments, many see their golden years as an opportunity to make the most of life by experiencing new cultures, learning a new language and meeting new people. Retiring abroad is the perfect opportunity to seize life in another country.

An ideal spot for family and friends to visit

Although it can be difficult being away from family and friends when retiring abroad, living in a beautiful country means that they can treat themselves to a little holiday each time they come to visit.

The cons of retiring abroad:

Culture shock

Living in one country for most of your life can make it difficult to adjust when moving elsewhere. If you come from a quiet village where people are mostly reserved, it could then be a shock moving to a Spanish city where the locals are vibrant and outgoing. It’s best to thoroughly research the country you are interested in to avoid surprises. One of the main points of retiring abroad is to engage in new experiences, so try to immerse yourself in the culture as much as possible.


Some aspects of retiring abroad can be a tedious process. When moving overseas, you may face multiple applications for various necessities to replace your UK equivalent. You will need to open a new bank account in your new country and possibly obtain a new driving license, for example. Doing your research and making a list of everything that needs to be completed before travelling can help you keep organised and prepare arrangements.

Missing family and friends

Although family and friends can come to visit you in your new country, it can be disheartening to know that they are no longer a five-minute drive away. Whilst you may not see them in person as much as you used to, technology makes keeping in touch much more manageable. You can keep them updated with social media posts, as well as video calls.


It’s easy to forget about the hidden costs and organisation involved when retiring abroad, mainly moving all of your belongings from one country to another. Making another list of all the costs and arrangements can help you budget and plan effectively.

Language barriers

Although many people in popular overseas retirement locations speak English, you could encounter some issues if you head to less touristy areas. Additionally, it could be a struggle when communicating with banks and government offices. It’s always worth attempting to learn the basics of your chosen country’s language to help make communication easier and help make new friends.

How do I transfer my pension overseas?

There are several options for transferring pensions overseas when you retire abroad. You must seek advice from both a financial adviser and a currency specialist to ensure that you do not lose money on tax implications and poor exchange rates.

For example, state pension payments can be transferred directly to an overseas bank account. However, as you are paid in the local currency, the amount you receive could fluctuate significantly each time due to market volatility. Additionally, pension providers will often charge a fee for international transfers. As a result, many retirees living abroad choose to transfer money from their UK bank account to their overseas bank account using a foreign exchange specialist such as Halo Financial.

At Halo Financial, we use various smart currency exchange solutions to ensure that you get the best possible exchange rate when transferring your pension payments abroad. Automated orders ensure that your currency transfer is only processed once the exchange rate hits your desired level, whilst regular international payments allow you to set up automated payments in advance.

To speak with one of our currency consultants about efficiently transferring your pension payments abroad, please give us a call on 020 7350 5474.

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