“Brits retiring overseas who fail to plan for the new pension rules that come into effect in April could end up wasting thousands of pounds or running into financial difficulties after moving abroad,” said the OverseasGuidesCompany.com in February.
“Relocating retirees are arguably the group most exposed to any potential pitfalls of the imminent changes, which are ground-breaking and less than two months away from going live,” said Angelos Koutsoudes, Head of OverseasGuidesCompany.com. “Not only is it more difficult to reverse a financial arrangement made in the UK after you have moved and become resident abroad, but expats drawing a UK pension also have the exchange rate to manage – when this goes against them, their income in their local currency falls. And expats who wish to use the pension changes to release cash from their pension pot should be aware of any tax liabilities this could incur, whether that be in the UK or their country of residence – finding out the most cost effective way to do this from a tax specialist with experience of helping expats is highly advisable.
“As an expat, your priorities will be slightly different to those of a fellow retiree in the UK. So while the changes mean that pensioners will no longer be obliged to buy an annuity with their pension, this option shouldn’t be ruled out. Why? The security of a regular income can bring peace of mind when you’re living abroad, and when managed cleverly with a currency transfer specialist, like Smart Currency Exchange, effects of fluctuating exchange rates can be reduced through solutions such as forward contracts.”
“A final tip is to keep a UK bank account open – and unlike abroad, this doesn’t usually cost anything. Apart from anything else, if you’re thinking of applying for one of the new pensioner bonds, you won’t qualify for one without a UK account.”