Brexit concerns outweigh covid-19 for retirement planning abroad: research

clock
Brexit concerns outweigh covid-19 for retirement planning abroad: research

With the risk of a second wave of covid-19 looming, research from Canada Life today revealed that Brexit concerns still outweigh those surrounding covid-19 for those looking to retire abroad. 

Almost half (46%) of over 50s who are planning on moving abroad when they retire are reconsidering where they might retire to, due to Brexit, with a further 44% claiming the uncertainty is making them reconsider their plans altogether. When it comes to covid-19 concerns, these figures are 39% and 37% respectively. 

Retiring abroad has long been a popular option, as Brits go in search of better weather (68%), a more desirable lifestyle (63%), higher standard of living (46%) and cheaper living costs (45%). For the eighth year running, Spain tops the charts again. Despite current travel restrictions, the top ten locations remain the same as last year, with both New Zealand and the Far East growing in popularity, and the top five not moving at all. 

To help navigate the complexities around retiring abroad, it’s important to seek professional advice."

 

Retirement location

%

Position in 2020

Position in 2019

Spain

49 %

1

1

France

24 %

2

2

Portugal

22 %

3

3

Italy

14 %

4

4

SE Europe (incl. Greece, Romania, Serbia, Cyprus)

12 %

5

5

New Zealand

8 %

6

7

Far East (incl. China, Thailand, Japan, Hong Kong, Singapore, Philippines)

7 %

7

8

Australia

7 %

8

6

America

6 %

9

9

Turkey

5 %

10

10

 

With many retirees considering moving abroad for a cheaper standard of living, the average monthly income needed is thought to be £1,404 - £378 less than the UK. This varies by country, with those hoping to retire in France thinking they will need the most at £1,562 per month, followed by Italy (£1,541).

Unsurprisingly, retiring in the UK is thought to be more expensive with an average monthly income of £1,782 required, increasing to £2,201 for those in London. 

For those considering retiring abroad, it's important to consider the impact of reciprocal social security agreements. Countries in the EU - as well as many others - have these agreements with the UK, which means the State Pension will increase each year in the same way as retirees living in the UK - but it's important to understand whether the agreements are in place further afield.

The research revealed, however, that just a quarter (25%) of those planning to head abroad know which countries had reciprocal payment agreements in place, and one in five (20%) did not even know such agreements existed. 

Andrew Tully, technical director at Canada Life, said: "Whether in search of better weather, a more desirable lifestyle, or cheaper standards of living, retiring abroad remains a popular option for the over-50s."

"However, with covid-19 dominating the global news agenda this year and a second wave anticipated, it's surprising that Brexit concerns come out on top and could indicate that longer term legislative fears are greater than shorter-term health and safety for soon-to-be retirees." 

"When retiring abroad, there are a number of key considerations, such as which countries offer reciprocal payment agreements, currency exchange rates and whether state pensions will keep pace with the cost of any living increases. To help navigate the complexities around retiring abroad, it's important to seek professional advice."

"This could make all the difference between living the retirement people have worked long and hard for, or falling victim to the potential retirement risks."

Subscribe to International Investment's free, twice-daily, newsletter

Author spotlight

Christopher Copper-Ind

Christopher Copper-Ind is editor-in-chief of International Investment. Before this, he was editorial director of The Business Year, from 2014 to 2017.