Expat Retirement Planning

Expat Retirement Planning

Expat Retirement Planning to retire as an expat can be a daunting experience and getting these decisions right is crucial to achieving the retirement plans that you have in mind. All the years of working in your younger years are in essence to provide for your latter years and keeping you in a lifestyle that you are accustomed to in your early years or maybe you are willing to sacrifice a small amount of that lifestyle to say retire overseas in a foreign country. We are seeing as the years go by the failure of UK pension schemes and even the governments saying that the current old age pension may not be available in 15 or 20 years. Starting to save early is one of the most important aspects of planning for retirement even though when you are young retirement is years away and we all live with the inevitable feeling of being young and invincible. Good retirement planning involves starting as soon as possible and with a solid investment plan that you follow through all of your lifetime. There will be hiccups along with way but with a plan you can always get back on track.

Retirement Planning Where Should You Start?

The starting point to successful retirement planning for an individual or couple has to be understanding what you want to achieve, and by when. Not knowing your retirement date in advance is like trying to read a map without knowing the final destination.

  • What age do you want to retire? and what standard of life do you expect?
  • Are you planning to retire abroad,
  • Are you planning to retire  in the UK?
  • If you do plan to retire in the UK, you must think about the most tax-efficient way to get the money you have saved back onshore.

Using offshore investment funds are often the cheapest and most flexible way for expats to save for retirement, and if you are in a tax-free jurisdiction, then you effectively have the benefit of a full tax rebate on contributions. Charges on these are likely to be lower than an “offshore pension” which will help boost returns.

When Should You Start Your Pension Saving?

If you start your pension saving early it puts you in the best position to make reaching your retirement goals as easy as possible. For example, if you start saving £100 a month at 23 and intend to retire at 65, you can expect a retirement fund of £223,809.. But start putting away that same sum at 40, and your retirement fund falls to just £69,788, assuming an annual investment growth of 7% and charges of 1%. If you wait a further five years and start saving that money away at 28 and the fund will fall to £161,885. Delay it by 10 years and it drops to £115,612 and by starting 15 years later you will lose a massive £142,775 of your pension fund, leaving you with just £81,034 at retirement. Generally people aged 18 to 24 are in their poorest years as they have just finished university or finished learning their apprenticeship or trade so its not as easy to save a lot of cash for their retirement. At the opposite end of the spectrum people aged 55 and above tend to have the most spare income as they have payed down their mortgage and their children may have finished school so they have a lot more free income spare.

Should You Look At Changing Your Planned Retirement Age?

If you look at your finances and you think you are not going to reach your retirement age with the amount you had planned you can always look to change your retirement date. Growing numbers of people dont just change their retirement date because of under funding but also because of the social lives working longer brings so if this helps funding then its a good reason to consider.

Why You Should Ensure You Have Access To All Of Your Pensions?

Many expats and locals UK residents will work for a number of employers end even in different countries which can make it more difficult to keep track of all the pension pots over the years. It is possible to miss out on some of your pension income simply because you have missed or forgotten about one of your pension pots so its always a good idea to keep details of them together. Its also possible to consolidate all pension pots into a Self Invested Personal Pension Plan (SIPP’s)

Pension Schemes over 10 years old may likely be dormant and most likely are under performing. If left unaddressed this could cost a lot of money and reduce your retirement income.

Focusing alone on pensions for retirement is not the best option and a cross mixture and approach should be adopted to investing. Retirement income is taxable and if you are not prepared financially it can see you giving away a large portion to the tax man.

People generally under estimate how much income they will need in retirement and its mainly due to time available. People forget that for their whole lives they are sleeping 8 hours, working 8 hours then have free time for 8 hours. In retirement people sleep for 8 hours then have 16 hours available for free time. If you have a hobby that doesn’t cost anything then thats great but vacations, golf and gyms all cost money. If you have double the free time than when you were working this cost rises considerably.

Can You Protect Your Expat Pension from Currency Fluctuations?

As an expat if you are planning to retire abroad, then currency fluctuations will have an impact on your retirement income from UK pension funds. There are a number of options available such as placing your UK defined benefit pension fund or defined contribution fund into a Recognized Overseas Pension Scheme or a Self Invested Personal Pension. This way the initial lump pensionable sum can be exchanged on transfer into a currency where you will be drawing down your pension from or a currency that is pegged like HKD/USD. This will help protect the pension fund from any fluctuations in currency movements.


If you are considering setting up a SIPP/ROPs, or have a SIPP/ROPs at present and want to know your options in full request a free pensions consultation with an independent adviser by entering your details using our contact form.

During the free consultation the adviser will answer any questions and provide impartial assistance which will enable you to:

  • Understand the benefits and avoid the potential pitfalls of a SIPP/ROPs
  • Identify whether a SIPP/ROPs is suitable for you
  • Investigate all the options available to you as an expat or UK resident
  • Clarify any costs, commissions or fees related to a SIPP/ROPs which you are unsure about
  • Have peace of mind about any decisions you make
  • At no time will you be pressured into making any decision, neither will you be under any obligation to proceed with any advice. Once you’ve entered your details, we will evaluate your inquiry before having one of our experienced advisers to contact you.

We normally meet clients face to face if possible but we also can offer advice over the phone and via email or face to face via a Skype call or which ever technology is best.

Click here for next page Expat School Fee Planning