10 tips for expatriates to help plan your retirement

March 17, 2021

One-third of your life will be spent in retirement and here at Prosperity Investment Management, we work with our expatriate clients so that they can enjoy their retirement to the full. It is vitally important that you plan ahead and think wisely about how, when and where you choose to retire as an expatriate. Here, we offer some helpful advice to make the process as easy as possible.

1. Choose Your Pension

As many expatriates choose to retire early, selecting the right pension is important to deliver the strongest returns. Utilising offshore products and schemes may provide significant benefits for UK expats when compared to UK-based pension schemes. As a financial adviser with decades worth of experience in this space, Prosperity Investment Management can offer our expertise to ensure you’re on the right scheme for you.

2. Be Tax-Smart

Similarly, when choosing your pension, make sure you consider all of the tax scenarios available to you. When withdrawing a lump sum from a UK-based pension scheme, you must usually be aged 65 or over and the first 25% of your fund is tax-free but you must then pay tax on the remaining 75%.

3. Provide For Your Loved Ones

In the UK, your pension is not included as part of your estate. However, the rest of your assets may be subjected to inheritance tax.

4. Choose Your Currency

Investing offshore means you have a wide variety of currencies in which to manage your pension in. How you decide which currency to choose depends on several factors, which include where you are looking to retire or how particular currencies are performing within the moment.

5. Decide Your Future

Lots of us will have dreamt of our dream retirement for many years. Whether it’s in the sunny climes of Dubai or along the picturesque coastline of Southern France, it’s time to make a final decision. Working out where you want to spend your latter years will make your pension decisions easier, thus allowing you to save faster and more effectively, getting you there more quickly.

6. Set Your Premiums

For your pension plan to be worthwhile, it’s important you pay the correct premium each month. To calculate exactly how much to pay, weigh up your income and expenses to see how much you could realistically put aside every month. Your premiums can change in line with your personal circumstances meaning you can save as little or as much as you like.

7. Start Saving Early

It stands to reason that the earlier you can begin to save for your pension, the more money you will put aside in the long-term. This will make it easier to achieve your pension goals and allow you to spread your contributions out. Not only that, investing in your pension as soon as possible gives you the opportunity to benefit from compound interest.

8. Transfer Your Existing Pension

If you’re relocating from the UK, your existing pension is likely to be frozen. 

Transferring your pension to a Qualifying Recognised Overseas Pension Scheme, or QROPS, could be the best move for you. Certified by HM Revenue & Customs and meeting their requirements for a pension, a QROPS can receive your full UK pension and allow you to grow your pension further free from the UK’s tax constraints. The benefits of a QROPS can differ depending on where you’ve lived within the past five tax years but our expertise in this area can help you determine if it’s right for you. Equally, a Self Invested Personal Pension or SIPP may be just as beneficial.

9. Be Committed

Saving for your pension is a lifelong commitment. In order to save the amount needed to enjoy your dream retirement, you must be committed to contributing to your pension on a regular basis. Combining this commitment with a will to begin your saving journey as early as you can will ultimately pay off further down the line. Every time you pay in, you’re providing yourself with extra comfort and security later in life to ensure you can make the most of the retirement you’ve worked hard to earn.

10. Have A Goal

As you plan for your dream retirement, it’s important to gauge a rough estimation of how much money you will need to save to make your dream not just a reality, but a comfortable reality too. Knowing what you need to aim towards can allow you to create an investment strategy and pension plan that delivers exactly what you need - something we’re well-equipped to help you achieve at Prosperity Investment Management.

Whilst no one can predict the future, you can act now to make it as stress-free and relaxing as possible for yourself, your loved ones and those around you. Whether you have several pensions in different countries through previous employment, one central pension in the UK or perhaps no pension at all, it’s never too soon to get your future in order. Having worked with many expatriates throughout the years, it’s a field we’ve plenty of experience in meaning we can help you achieve those goals sooner rather than later. Contact us today to see how our services can be of benefit to you.

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