He said: “The UK Government intends to change how UK state pensions are calculated for some of those living abroad, affecting UK expats during an already turbulent time.
“If the Government goes ahead with this change in rule, they need to lay out clear foundations for UK expats on the new state pension breakdown.
“We urge UK residents to do their research before moving abroad and have already lived in Australia, Canada and New Zealand.”
James Andrews, a senior personal finance editor at money.co.uk, also commented on the changes: “The recent changes to state pensions serve as a timely reminder that you have to put a comprehensive financial plan in place if you’re intending to retire abroad.
“For starters, the process of moving your money overseas can take quite some time, so it’s best to start as early as possible.
“In some countries for example, you can’t even set up a bank account without a residential address there, so it might be worth applying for a prepaid travel card or current account to act as a stop-gap while you sort out the Ts and Cs.The quickest and easiest way to get an overseas bank account set up is to speak to your existing bank to see if they have a presence abroad – it’ll make moving your money to your desired country much easier.
“The other issue that needs careful consideration is your credit history. When you emigrate, your credit history unfortunately doesn’t move with you – meaning you’ll be starting completely from scratch.
“In practice, this will likely mean a massive reduction in your borrowing potential, so you need to have a plan in place in case of unexpected bills. Since you might not be able to rely on a credit card or qualify for a loan, it’s a good idea to have some emergency funds in place to see you through any financial difficulties.”
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Salisbury House Wealth examined data from the Government and found the number of UK pensioners living in the EU fell to 463,774 during 2020, down from 474,721 in the aftermath of the Brexit referendum in 2016.
Even the more popular retiree destinations saw decreases, as the following details:
- Italy – falling 10 percent to 33,435 in 2019/20, down from 37,135 in 2015/16
- Cyprus – falling nine percent to 17,219 in 2019/20, from 18,768 in 2015/16
- Spain – falling five percent to 103,382 in 2019/20, from 108,442 in 2015/16
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Those with an overseas account will need an international bank account number (IBAN) and bank identification code (BIC) when claiming.
The payments are paid in local currency, meaning income may be affected by exchange rates.
State pension payments can be paid once every four or 13 weeks for those based abroad.
This post originally appeared on Daily Express :: Finance Feed