Things to consider before retiring somewhere sunny

Updated on 24 August 2015

Before you jet off to Spain or Australia for your idyllic retirement, make sure you’ve given these some thought.

Early retirement

Is there still a chance to move your pension pot overseas? The Qualifying Recognised Overseas Pension Scheme (QROPS) is an overseas scheme which UK pension rights can be transferred into without being hit with massive charges. They’re more flexible and can have significant tax and investment perks. Find a list of schemes on the website.

You can also use it to buy a deferred annuity contract. This delays annuity payments until you want to receive them.


You’ll need a visa to move to certain parts of the world, the USA and Australia being notable examples.

Make sure you leave plenty of time to get these sorted as the process can be lengthy. Your best bet is to check the appropriate foreign embassy or governmental body in advance to see if you need one.

Cost of living

There are both one-off and ongoing payments to take into account here. Think about flying and putting down a deposit on a house alongside maintaining financial assets in the UK.

It’s worth considering just what the cost of living is like in the country you want to move to.

The cost of living is highest in the likes of Venezuela and Australia, while India is the lowest. Bear in mind that the places with the lowest cost of living are areas affected by political unrest, war and natural disasters. Not ideal if you want a peaceful retirement.

Numbeo is a good site to use to directly compare prices of different items as well as property prices, crime, pollution and overall quality of life.

For example, a 500g loaf of bread is £3.29 in Hamilton, Bermuda and only 10p in Tunisia’s capital city, Tunis. The average loaf in Lille, France is 81p while it’s £1.04 in Sheffield.

Lloyds has a collection of international expat tools to help you work out the costs. The British Wealth Map will tell you how much the average expat's lifestyle has or hasn’t improved since they moved. It factors in important lifestyle indicators like weather, happiness and how much leisure time they have.

Keep up with your finances using the loveMONEY Track tool

How much of the year you’ll spend there

Some retirees may just want a holiday home that they can live in for six months out of the year. If you’re going to do this, you need to factor in regular flights and travel costs into your budget too.

Shipping your stuff

In comparison to everything else, it seems a bit petty. But you’ve probably accumulated a lot of stuff over the years and it might be time to have a clear out.

Movehub has loads of valuable information on shipping costs and carriers to various destinations worldwide. While you’re there, it has a wealth of travel and visa guides for expats.

You’ll also need to tell your local council where you’re moving to so that they have a forwarding address for you.


Think this one through carefully. You won’t be able to open a UK savings account anymore because you won’t have a UK address, but you can open one with a bank in an offshore centre.

There are a few international banks you’ll recognise that will let you bank in a different currency. They may even let you carry on with financial commitments in the UK such as mortgages and bills. It's also worth mentioning that you can hold a domestic account alongside an international account.

Compare current accounts


This one is a bit tricky as people often misunderstand what tax they are likely to pay when they move overseas.

You have to report worldwide income to tax authorities in your new destination as you might have UK tax to pay on investment or rental income in the UK. Double tax relief is available where income is taxable in both countries through a double taxation agreement.

Your pension may also be pushed into higher tax bands depending on your taxable income and whether you’re classed as a UK resident for tax purposes.

Savings are generally taxable abroad, including ISAs which are sheltered from tax in the UK. There may be local tax-free equivalents at your new home, such as France or Canada.

You may also be liable for Capital Gains Tax, though family homes are excluded in some countries.

As you can imagine, Inheritance Tax is different in different countries and the rules about who you can leave your estate to vary. In France for example your children have an indisputable claim, meaning that you can’t simply leave everything to a surviving spouse.

And even though you’ll live and pay taxes abroad, you’re still at risk from HMRC. If you’re still legally domiciled in the UK at the date of your death, the UK Government will have claim on your estate as well.

Make sure you take legal and tax advice before you move.


The International Pension Centre (IPC) will be dealing with most overseas pension queries. Check if you’re eligible for the new State Pension before you get in touch with them.

If you qualify for the UK State Pension, you can claim it wherever you live. The money can be put into either a UK or overseas bank account in the local currency, cutting out fees and bank charges. You can choose to have it paid in every four or 13 weeks unless it’s less than a fiver a week, in which case you’ll get paid once a year in December.

In some places your pension will grow and it others it won’t, depending on whether there is a reciprocal social security agreement between the UK and your retirement destination. Generally speaking, countries in the European Economic Area are good, while many Commonwealth countries, including Australia, New Zealand and Canada aren’t. 

If you don’t want your pension transferred from a UK bank account you’d be better going through a broker than paying bank fees. Beware though, currency brokers aren’t covered by the FSCS so make sure they’re authorised by the Financial Conduct Authority (FCA) first to keep your money safe.


Firstly, tell your GP and dentist you’re going away as you’ll need medical records from them. 

You’ll be entitled to healthcare in the following countries, though some will require additional payments for what you receive:

  • Australia
  • Canada
  • France
  • Germany
  • Ireland
  • Italy
  • New Zealand
  • Spain

Though they’ve got good healthcare systems, UK expats should get their hands on an S1 form before they move to France, Spain or Italy. Top-up medical insurance is still recommended as you need to pay a proportion of the healthcare cost.

The USA and South Africa put much more emphasis on private healthcare so medical insurance is essential if you want to move there.

If you still plan to live in the UK for at least six months of the year, then you should think about international medical insurance. 

Bupa Global, for example, has a whole range of health plans to choose from, depending on what country you spend most of your time. Some of their plans are modular so you can add on cover for Maternity, care in the USA and evacuation; some plans, like their new plans for UK residents Bupa Global Select and Premier, have them included. 

The Bupa Global Select plan provides you with up to £1 million in annual regional cover and gives you access to both hospital and out-patient care. You’ll also get complimentary annual health checks and accident-related dental treatment. Cancer treatment and mental health care are both paid in full.

For a little bit extra, the Bupa Global Premier health plan will cover you anywhere, including the US. It covers you up to £1.5 million, including private rooms and alternative treatments if you need them. Keep your day-to-day health in check as well with health examinations, dental and eye check-ups.  

Other firms which offer international PMI include Aviva and AXA. 

Get a free, no obligation private medical insurance quote with loveMONEY


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