Over 4 million UK residents have decided to move abroad in the last decade and unfortunately, recent problems in the strength of the GBP has affected those who rely on their UK pension. UK residents still decide to move abroad in search of a better life with the likes of Spain, Portugal and the Canary Islands leading the list of destinations. They are not tax havens however the likes of France, Spain, Portugal, Malta and Cyprus do still have their own tax advantages for people looking to move money over there.
There are important things to think of when living abroad that many people just don’t feel like they are able to do it when they start to get older but the truth is that there’s no better time. If you are even contemplating it, make a pros and cons list and see which one wins and by how much (I know, very cliche but it’s cliche for a reason – it works!). Talk to your friends and family and see what they say about the possibility of you moving abroad, you may find that many of them are excited for you (and for themselves if they get to come and stay!).
Once you have decided to go, make a list of the steps. Firstly you’ll need to choose a destination. Then think about the requirements to move to that destination, for example Australia allows only qualifying individuals to emigrate. Keep that checklist going until you reach the actual moving stage. Then when you finish the list, start ticking things off!
One of the advantages to moving abroad is unlike in the United Kingdom where by the time a pensioner reaches 75 they are forced to buy an annuity or to go into a restrictive alternative secured pension regime, this is not compulsory if you are living abroad. These pensions don’t have any enforced annuity purchasing and allow users much more flexibility to invest their money into residential property and withdraw as much or as little as they require.
To move your pension to a different country to benefit from their advantages, the first thing you need to do is transfer the amount to a qualifying and recognised foreign overseas pension plan. Once the money is in the scheme, it is outside Revenue and Customs jurisdiction so the rules no longer apply. However, the provider of the pension will continue to report details of the pension to the HMRC but will only do so until you have been a resident outside of the UK for five years.