Australia, which wasn’t even in Standard Life’s top five retirement destinations last year, is now the second most popular place for Britons who have retired abroad, according to the life insurance giant, which looked at where its customers were asking their annuity payments to be sent to. It is followed, in order, by the US, France and Ireland.
Just over 3,000 customers were included in the data, a Standard Life spokesman said.
Compared to last year’s list, France has dropped to fourth place from second, the US has stayed in third place, Ireland is still in fifth place, and Canada has dropped out of the top five. (See chart, below.)
In order, the top twenty countries to which Standard Life currently sends annuity payments are: Spain, Australia, USA, France, Ireland, Canada, New Zealand, Cyprus, South Africa, Germany, Italy, Portugal, Thailand, Switzerland, Greece, Jamaica, Netherlands, Sweden, Barbados and the Philippines.
Dream needs ‘planning, advice’
Standard Life head of pension of pension policy John Lawson stressed that making the dream of retiring abroad come true "does require careful planning and advice".
"Many people think living abroad is cheaper than living in the UK, but this isn’t always the case," he added.
"Doing your homework in advance of moving, matching your retirement income and expenditure, and making the appropriate decisions around purchasing an annuity or using income drawdown are key considerations.
Your retirement income could also be subject to exchange rates and currency fluctuations, as well as local tax laws.
“You also need to think about your state pension and what, if any, reciprocal agreement is in place."
Reciprocal agreements exist in certain countries but not others, and, as such organisations as the International Consortium of British Pensioners have long been arguing, retirees in countries that don’t have such agreements often find themselves significantly less well off than those who move to countries where such agreements do exist. This is because the British pensions of those who retire to such countries as Australia, Canada, New Zealand and South Africa, which do not have reciprocal agreements, are frozen at the rate they were at when the pensioners emigrated, rather than getting annual cost-of-living increases.
According to Lawson, during the course of a 20-year retirement, an individual’s basic UK pension "could halve in real terms if a reciprocal arrangement is not in place".
Countries where retirees do receive cost-of-living pension increases include all the European Union states as well as Switzerland and Gibraltar. British retirees in the US also receive pension increases. (A full ist of countries that have reciprocal agreements with the UK is available here.
|Country and rank, 2011
|Country and rank, 2010
Source: Standard Life
To see Standard Life’s list of top tips for Britons considering retiring abroad, click on blue "Read full article" arrow (below left).