Brits retiring abroad who are adapting their financial affairs to suit April’s new pension rules are also being advised to reassess their worldwide estate and inheritance plans once they are non-residents of the UK.
"Expat priorities will be slightly different to those of a fellow retiree in the UK, which means that relocating retirees are arguably the group most exposed to any potential pitfalls of the imminent changes," said Angelos Koutsoudes, Head of OverseasGuidesCompany.com, which helps people buy property and move abroad.
"It’s crucial their financial planning takes into account inheritance law and tax in both the UK and their new country of residence, where applicable, as inheritance laws vary by country. It’s so important for expats to check their individual situation and get the right advice to suit their specific requirements. It is far more difficult to reverse a financial arrangement made in the UK after you have moved and are longer resident here, so seeking professional advice as early as possible is critically important.
"Expats with UK assets and a sterling pension or income also need to consider the implications of the exchange rate. When the Pound gains value against the euro, a UK pension is worth more in, for example, Spain or France, however it also means a property in the Eurozone is worth less in pounds — not ideal if you intend to pass it on to UK based heirs. Hence, expats may wish to consider keeping most of their assets in Sterling and based in the UK. Many expats do this by investing in a buy-to-let in the UK when they retire abroad.
"Despite the freedom the new pension rules will bring, expats shouldn’t discount the option of an annuity either. Why? The security of a regular income can bring peace of mind when you’re living abroad, and when managed cleverly with a currency transfer specialist, like Smart Currency Exchange, effects of fluctuating exchange rates can be reduced through solutions such as forward contracts.
"A final tip is to keep a UK bank account open — and unlike abroad, this doesn’t usually cost anything. Apart from anything else, if you’re thinking of applying for one of the new pensioner bonds, you won’t qualify for one without a UK account."
