Spain top choice as overseas retirement destination

Spain is still the number one destination for British people dreaming of a retirement abroad, a new survey reveals.

It is the seventh consecutive year that Spain has taken top spot in the survey since it was first carried out by pension and investment experts Canada Life UK in 2013.

France and Portugal took the second and third spots, with Italy and South East Europe (Greece, Cyprus, etc) rounding out the top five. The US fell three places to ninth spot, and Turkey was a new entry at number 10.

While Brexit is still making older people think twice about the prospect of retiring abroad, it is seen as less of an issue than it had been immediately in the aftermath of the referendum in 2016.

The latest survey shows that nearly half of respondents shows that Brexit was making them reconsider spending their old age abroad. This compares to three quarters who were having second thoughts when surveyed straight after the referendum three years ago.

“Whether it be the hope of better weather, cheaper living costs or simply a lifestyle choice, many of us harbour desires to retire abroad,” said Andrew Tully, technical director at Canada Life.

“Given the prevailing headwinds and uncertainty continuing to surround Brexit, it’s perhaps not a surprise to find the ‘B’ word having a big influence on peoples’ plans for retiring abroad.”

He continued: “Other things people will need to consider include a new set of retirement risks, whether that be local tax laws, feeling the pinch because of currency exchange rates or financial scammers.”

However, Tully believes one of the biggest issues that people remain unaware of is the issue of frozen pensions.

Some 550,000 British pensioners living overseas miss out on annual state pension hikes, including those moving to popular countries like Australia, Canada and New Zealand, while others get the usual increases received by retirees in the UK.

One in five aspiring expats are unaware of this, according to the Canada Life survey.

British expats who move to EU countries, plus a few others like Switzerland and Norway, do not have their state pensions frozen, and this will not change after Brexit.

Canada Life top ten retirement destination list

  1. Spain
  2. France
  3. Portugal
  4. Italy
  5. South East Europe
  6. Australia
  7. New Zealand
  8. Far East
  9. America
  10. Turkey

Article published 27th August 2019