Life in the sun may have its drawbacks
IN 2017, the International Currency Exchange (ICE) undertook a study of the best places to retire abroad.
It found that the most common reason for wanting to retire overseas is, unsurprisingly, better weather.
Some 76% of people listed this as a major reason.
It’s hardly surprising given that there were just 1,432 hours of sunshine recorded in the UK and average temperatures of 9 degrees (in 2016).
Money matters came next on the list of priorities, with 74% of people mentioning cheaper living expenses, and 68% saying they were attracted by better value for money on property.
The rest of the top five was rounded out by a slower pace of life and better health.
Financial issues, however, can be a barrier to retiring abroad.
The state pension is the core building block of retirement income, but there can be a huge impact on this benefit when moving overseas.
If the country people retire to has a reciprocal agreement in place with the UK, the state pension will be paid and increase each year as normal.
This currently covers any country in the European Economic Area as well as other major countries such as America.
However, Brexit could have an impact on these reciprocal agreements.
Currently if people move to an EU country the UK state pension automatically increases each year.
When we leave the EU these arrangements will form part of the exit negotiations, and so the outcome is uncertain.
There is no agreement with a number of countries including Australia New Zealand and Canada.
In these countries, the state pension is frozen for a UK citizen who moves there.
This can have a dramatic effect on the income paid. For example, somebody who retired to Canada in 2004 would in 2014 have been receiving a state pension of £4,381 which is £1,822.60 less than the £6,203.60 they would have been getting had they retired just across the border to the US.
Where you retire to also has huge implications for inheritance. Different places have different inheritance tax rates and some countries have a mandatory inheritance system which can override your will.
Healthcare can also be a major issue as many countries do not have free healthcare.
Even if you are hale and hearty now, you never know what the future holds, so taking out health insurance abroad is a sensible but potentially costly precaution.
If you’re still determined to enjoy a life in the sun, then the ICE study reveals the top 10 best retirement destinations as: 1. Tenerife, 2. Lanzarote 3. Portugal 4. Panama 5. Greece 6. Malta 7. Spain 8. France 9. United States of America 10. Australia.
For most of us, a holiday is a better way of getting away from the British weather for a while.
When you’re booking your holiday, don’t forget that Age Concern Liverpool & Sefton sells travel insurance.
Our Travel Insurance is open to ALL ages, and has a UK based customer service centre and claims handling team.
Call us on 01704 542993 to get more information and a quote.
Los Cristianos in Tenefife – one of the top retirement destinations