Most UK Expats Intend To Retire Abroad

by Phillip Morton, Investors Offshore.com

25 November 2009

With the cost of retirement in the UK estimated to hit over GBP400,000 (EUR442,000), UK expats are voting with their feet and choosing to retire abroad, according to findings from Alliance and Leicester International (ALIL).

According to the bank, France (18%) is the most popular retirement destination for expats followed by Spain (13%) and then the UK (12%).

However, while 88% of expats intend to retire abroad, access to UK-based family and friends still appears to be important, with 57% intending to retire in Europe. Indeed, 10% of expats cited being away from family and friends as a major barrier to retiring outside the UK.

Further afield, Thailand (5%), the US (4%) and New Zealand (3%) are all potential retiree destinations.

The ALIL survey found that expats intend to fund their new lives in the sun through a variety of methods including savings (27%), UK state pension (23%) and private pensions (20%).

Property is a big source of retirement funding for expats, with 6% relying on rental income, 6% intending to sell a residential investment and 2% planning to take out an equity release plan.

When considering the key factors that contribute to the chosen retirement destination, better quality of life was voted top (21%). Better weather came second (20%), and value for money third (14%).

However the expats who intend to retire abroad do have some concerns about retiring in another country. The quality of medical facilities and dealing with general medical issues – potentially in a foreign language - was the biggest worry for 22% of expats.

Finances were also a concern, with 13% worrying about exchange rates and 12% concerned about having sufficient money to survive. Frailty was also a concern, with 14% of women citing this as a worry compared to just 10% of men.

Lynette Byrne, Head of Marketing at Alliance & Leicester International, commented:

“It is interesting to see that many UK expats have settled in their new home, with 87% of UK Expats intending to retire abroad. However, while some Expats might prefer life outside the UK, they are still very attached to friends and family thus settling in European destinations that are only a low cost flight away."

“This research really highlights the international nature of society today and raises some interesting questions as to how people are going to manage their finances and protect their savings against interest rate fluctuations."

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