As stubbornly high inflation stretches household bills and pensions to the hilt, you might not be alone in thinking that maybe your money might go further abroad?
The cost-of-living crisis is persuading many people to consider retiring abroad, as they seek a better quality of life. Seeking a new, slower lifestyle in the sun is not exactly a new ambition – more than 1m British pensioners are living abroad receiving the UK state pension, according to Department for Work and Pensions figures. Within the EU, there are 207,300 British citizens aged 65 according to data from the Office for National Statistics.
But how easy is it to retire abroad after Brexit? It rather depends on a handful of key things.
Finance & visas
You now need to get a visa to move to the EU, which is not necessarily too expensive and can be a relatively painless process if you get find the right experts to help you. Bear in mind that getting a visa itself might not cost more than £1000-2,000 per person when all the legal and admin costs are covered.
But visas designed for non-working people require that they are financially self-sufficient, and because this varies between countries, you do need to make sure you know what the minimum income is where you are hoping to go. And note the word income, as it may not be sufficient to have a big savings pot.
Read up on the latest figures for the Non-Lucrative Visa for Spain; the D7 visa for Portugal, the various options open to people moving to France, or other countries in our buying guides.
Healthcare
Healthcare is another key consideration – quality of; access to; and cost of. Some visas require private healthcare cover which may cost you £1,000-£2,000 per year, depending on your age, health and the country. If you are in receipt of a state pension then you may be able to access state healthcare via the S1 form, available from the NHS.
In Spain you might be entitled to access Spanish healthcare on the same basis as a local, but bear in mind that means a contributory element. Read up on the healthcare options for each country, and whether it’s commonplace for expat retirees to pay for private healthcare – as it is in in Cyprus, for example.
Tax and tax incentives
Find out what your position will be if you become tax resident in your country of choice. Pension income will be taxed – but at what rate depends on the country or even the region’s policy. A number of countries have tax incentives for people relocating, some of which last as long as 10 years.
This includes Portugal’s non-habitual residence regime, but Cyprus, Greece and Malta also offer incentive schemes, and Southern Italy offers a scheme in eight areas with towns of less than 20,000 where retirees can pay a 7% tax on their pensions. Take expert advice on your tax position if retiring to a certain country.
Perspective
I think the final answer to the question really depends on your drive and adaptability. Moving abroad is a terrifying prospect for many people and doing it at retirement age can be even more so, if you are not eager to integrate, learn the language, attempt to get to grips with local bureaucracy. Will you be comfortable about driving abroad? If not, how good it the local public transport?
Many countries offer very welcoming local communities who revere the elderly members of society and might make the transition easier rather than harder. Some areas offer groups and activities for expat retirees, whether walking in the local mountains, language classes or portrait painting. Retiring abroad is like many things in life: you can expect to get out what you put in.
