Spain has been named as the most popular overseas retirement hotspot for UK consumers by Standard Life.
Research by Standard Life reveals that the top six overseas retirement hotspots for Brits are Spain in first place, followed in order by France, USA, Canada, Ireland, and New Zealand.
Andrew Tully, Senior Pensions Policy Manager, Standard Life commented: “Retiring abroad is a dream for many people but without careful planning and advice, things can potentially go wrong very quickly.”
According to Standard Life, 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 .
Tully continued: “One significant consideration before you move is to think about your state pension and what, if any, reciprocal agreement is in place. 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.”
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