Standard Life has revealed the top retirement hotspots outside the UK with the Spain at the top of the list, followed by Australia, USA, France and Ireland.
John Lawson, Head of Pensions Policy, Standard Life commented: "Retiring abroad is a dream for many people, but does require careful planning and advice. Many people think living abroad is cheaper than living in the UK, but this isn't always the case. Doing your homework in advance of moving, matching your retirement income and expenditure, and making the appropriate decisions around purchasing an annuity or using income drawdown are key considerations. Your retirement income could also be subject to exchange rates and currency fluctuations, as well as local tax laws.
"You also need to think about your state pension and what, if any, reciprocal agreement is in place. A reciprocal agreement entitles you to any increases in the UK state pension paid for by the country you retire to. However, if there isn't a reciprocal agreement in place, then you need to be very careful your retirement income is sufficient to cover your living costs over a long period of time. Over a 20 year retirement, your basic state UK pension could halve in real terms if a reciprocal arrangement is not in place."
If an individual moves abroad permanently, any increases in their UK state pension will only apply if they are living in an EU country (including Gibraltar and Switzerland), or a country with a reciprocal social security agreement with the UK. Where the individual is living outside these countries, the amount of UK state pension they will receive each year is frozen at the amount initially paid when first claimed (or if the pensioner emigrated more than one year after payment began, at the rate in force when emigrating). Popular retirement countries outside these reciprocal agreements include Australia, Canada, New Zealand and South Africa.
Those who are considering retiring abroad in the future, but are wondering if their retirement savings will be sufficient can go to www.yourfuturemoney.co.uk, where they can check if their retirement planning is on track.
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Notes to editors:
- In August 2010, the top retirement hotspots were: 1st Spain; 2nd France; 3rd USA; 4th Canada; 5th Ireland.
- Standard Life currently pays pensions to over 3,000 people using an overseas bank account.
- A list of European Union countries and countries that have reciprocal arrangements with the UK is available from the DWP website: www.dwp.gov.uk/international/social-security-agreements/list...- countries/. A reciprocal social security agreement is where the country of residence agrees to increase the state pension in line with any increases in the UK.
About Standard Life:
Standard Life is a leading long term savings and investments company headquartered in Edinburgh and operating internationally. Established in 1825, Standard Life provides ISAs, life assurance, annuities, mutual funds, investment bonds, tax efficiencies, financial planning advice, and investment management to over 6.5 million customers worldwide.
Senior Media Affairs Manager
Standard Life plc
30 St Mary Axe
44 (0)20 7872 4481
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