Hotspots for retiring overseas

Cadaques  Catalonia, Spain

Every summer, the number of people investigating overseas retirement shoots up - after the annual summer holiday opens our eyes to what life could be like if it was that bit sunnier and closer to the sea. There are ten destinations we're most likely to be drawn to.

SEE ALSO: The best value destinations for Brits retiring abroad

See also: Where's the best place to retire abroad?

1. Spain
This is the most popular place for Brits to dream of retirement - by quite a margin - with expats drawn to the sunny weather, relative affordability, and large expatriate community that makes it feel like home.

2. US
The enormous variety on offer in the US means there's a retirement to suit anyone - with the added bonus that everyone speaks English in most States. You can also pick your weather - and can stick with the sunshine if that's what appeals the most.

3. Australia
The weather, the outdoors lifestyle, and the fact that everyone speaks English is a huge bonus. And while it may be tricky to come home very often, there will be no shortage of people who want to visit for a holiday.

4. France
Expats are attracted by the fact that the weather is marginally better than in the UK, and that property prices are far lower. There's also the advantage that it's not too far away to come back to Blighty every once in a while.

5. Italy
The third most popular European country for expats offers a vibrant lifestyle in its cities, and affordable living in the hills and by the sea. The weather is a major attraction too, for expats sick of the rain.

6. SE Europe
The combination of lower property prices and a far lower cost of living means retiring in beautiful places like the Czech Republic and Greece can buy a higher standard of living than may be available in the UK. The weather is more attractive too.

7. Portugal
This has many of the attractions of life in Spain, and although the expat community here is smaller, it is concentrated in particular areas, so it's easy to track down your fellow Brits if that's what you have in mind.

9= Far East
The weather, the natural beauty on offer, and the low cost of living in many parts of the Far East make this a major consideration for thousands of pensioners.

9= New Zealand
The Lord of The Rings trilogy helped open many people's eyes to the stunning scenery in new Zealand. For those who want to get away from it all, in an English-speaking community, with plenty of other expats, it has a great deal to offer.

10. Canada
There's a huge variety on offer in Canada, and with much of the country speaking English, it's accessible to expats too.

What to consider

Of course, retiring overseas is very different from the lifestyle you experience on holiday, so there's a great deal to consider when picking a spot for retiring abroad. There are five particularly key issues for retirees.

1. It's vital to look at arrangements for the state pension. At the moment, if you retire in Europe, there's a reciprocal arrangement in place, so your pension will rise with UK pensions. In the US, by contrast, there's no such agreement in place, so your state pension is frozen on the day you leave - and will therefore be rapidly eroded by inflation.

2. You also need to plan for your health. Once you leave, you will no longer be entitled to treatment from the NHS, so look into your local rights, and where sensible, consider taking out health insurance in case you get ill.

3. Consider currencies. For those who have their income paid in pounds, or retain British assets, the collapse of the pound in recent months has been a painful lesson in how things can change when currencies move. It means you need to factor fluctuations into any plans you make.

4. Think too about local laws and customs, and whether you will be comfortable integrating into them. There are those who retire overseas and live a very British lifestyle among expats, but studies show that over the long term, the more integrated expats become, the higher their quality of life.

5. Finally, you need to think about the long term and what you will do if you need long term care. Is the kind of care you want available in the location you have chosen, and if not, would you be happy relocating at that stage in life?

How we spend our pensions
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How we spend our pensions

Figures from Saga show that the over 50s now account for the majority of money spent by Brits on travel and tourism. They have the time to spare, the money, and they are healthy enough to take on the world.

A poll from Abta found that in the wake of pension freedoms, 35% of people were considering cashing in at least part of their pension to travel. A separate study by Senior Railcard found that pensioners take an average of three holidays a year, plus two weekends away, and 17 day trips.

Research from Senior Railcard found that retirees eat out an average of three times a month. However, one in ten do so more than twice a week, and one in three people said that one of the first things they did when they retired was to go out for lunch with their friends.

Of course, just because retirees want to enjoy themselves, it doesn't mean they are happy to throw money away. The vast majority are keen to eat at lunchtimes, when a fixed lunch menu tends to be cheaper, and canny retirees are skilled at tracking down pensioner special offers too.

Figures from the Office for National Statistics show that on average nearly a fifth of the money spent by people aged 65-74 is on leisure. This includes everything from the cinema and theatre to golfing and gardening. They spent more on this than on food, energy bills and transport.

A report by Canada Life found that retirees are spending £4,279 a year on having fun - that’s more than £1,000 more than they spend on boring essentials, and is a 74% increase over the past ten years. It went on to predict that this trend was set to continue, and that pension freedoms would encourage people to spoil themselves a bit more in retirement

Pensioner property wealth is now over £850 billion, and all these family homes don’t look after themselves. The Senior Railcard survey put home renovations in the top 20 activities people got stuck into on retirement, and figures from ABTA found that almost a third of people who were considering raiding their pension pots under the new pension freedoms planned to spend the cash on their home. This seems like an eminently sensible investment - looking after what is undoubtedly their most valuable asset.

Unsurprisingly, while some pensioners are very well off indeed, others are struggling with debt. Figures from Key Retirement found that the average retiree has £34,000 of debt.

Most of this is mortgage borrowing - in many cases driven up by the number of people who unwittingly signed up to an interest-only mortgage. However, credit cards, overdrafts, and loans are also common. It’s why so many pensioners have used pension freedoms to access enough cash to pay their debts.

The day to day basics are swallowing up their fair share of pensioner cash too. On average, people aged 65-74 spend a third of their weekly income on essentials like food and bills - which is hardly living the high life.
The bank of gran and grandad has become an increasingly vital source of cash for families. According to Key Retirement, of those who release equity from their property, 21% of them use the cash to treat their children and grandchildren. This includes an average of £33,350 to help children get onto the property ladder, £6,000 to buy them a new car, £11,000 on family weddings, and £24,780 giving grandchildren a helping hand.

While retirees are quite rightly spending what they need to enjoy retirement, they are hardly all throwing caution to the wind, buying flash cars and spending the kids' inheritance.

Most expect to have something left over to pass onto their family after their death. Some 69% expect to leave property in their wills, and 75% expect to leave cash - according to - because while baby boomers know how to have fun - they also know how to save for the future.


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