Are Austerity Measures Driving Retiring Brits Overseas?

Over 50% of British citizens working abroad are choosing to remain in their adopted country, with people of retirement age both in the U.K. and abroad being more and more inclined to spend their twilight years as expats.

London, UK (Pryce Warner Internaitonal) April 1st, 2011 - Recent studies have shown that 56% of all expats plan to never return to the UK, and that the older the expat, the less likely they are to return home. In fact, 80% of expats 65 and over don’t plan to return to the UK at all. When queried, the main reason people cited for moving abroad was due to poor economic prospects in the U.K.

Since 1981 the amount of British pensioners living abroad has risen from 252 000 to over a million today, with the biggest increases coming in the last five years. It is not just expats planning to retire abroad, 38 per cent of over 55s in the UK are planning to relocate in the next few years. This trend also shows no sign of stopping, as it is estimated that 19% of retired Brits will living overseas by the year 2050.

Danny Sriskandarajah, Institute for Public Policy Research Associate Director said: “Our report shows more people are moving from country to country: to study, to work and increasingly to enjoy their retirement. This 'silver flight' is the result of more Brits being increasingly willing and able to spend their retirement in Adelaide than Accrington”

New pension regulations announced in the budget mean it will only be possible to transfer £50 000 per year into a UK pension, making the prospect of retiring abroad and getting a foreign pension all the more appealing, especially for high earners.

In addition to being able to avoid changes to UK pension laws, having a foreign pension can also allow you to circumvent IHT (inheritance tax), adding another incentive for Brits to move their pensions, and themselves, abroad.

For those that have a foreign pension, or are considering moving their pension as part of a move abroad, a QNUPS (Qualified non-UK pension scheme) could mean avoiding any U.K. based IHT.

David Harra, a Senior Market & Investment Analyst at Pryce Warner International commented: “We have always known that the majority of expats are glad they moved, but we were surprised to hear that many people are choosing to migrate due to growing pessimism over the financial prospects in the U.K.”

“Media coverage of austerity measures has so far focused on the impact on the lives of U.K. residents, but now it seems that it may also impacting the lives of expats and people considering settling permanently outside the U.K.”

Pryce Warner International Group provide International Asset & Investment Management, Independent Financial Advice & QROPS Overseas Pensions.

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By: Aneil Fatania
Financial Editor
Pryce Warner International Group
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