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Brexit concerns outweigh Covid-19 for those planning to retire abroad

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With the risk of a second wave of Coronavirus looming, research from Canada Life reveals that Brexit concerns still outweigh those surrounding Covid-19 for those looking to retire abroad. Almost half (46 per cent) 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 per cent claiming the uncertainty is making them reconsider their plans altogether. When it comes to Covid-19 concerns, these figures are 39 per cent and 37 per cent respectively. 

Retiring abroad has long been a popular option, as Brits go in search of better weather (68 per cent), a more desirable lifestyle (63 per cent), higher standard of living (46 p[er cent) and cheaper living costs (45 per cent). 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. 

With many retirees considering moving abroad for a cheaper standard of living, the average monthly income needed is thought to be GBP1,404 – GBP378 less than the UK. This varies by country, with those hoping to retire in France thinking they will need the most at GBP1,562 per month, followed by Italy (GBP1,541). Unsurprisingly, retiring in the UK is thought to be more expensive with an average monthly income of GBP1,782 required, increasing to GBP2,201 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 per cent) of those planning to head abroad know which countries had reciprocal payment agreements in place, and one in five (20 per cent) did not even know such agreements existed. 

Andrew Tully, Technical Director, Canada Life, says: “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.”
 

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