In Focus News & Insights

For expats, when it comes to money, planning ahead is essential so that your financial future remains stable.

There are several effective ways to get prepared, which include everything from taking out a suitable life insurance policy for expats, moving your pension into an overseas scheme so that you get tax advantages on your retirement savings, and making smart decisions on investment opportunities so they will provide worthwhile returns in the future.

One major investment opportunity that increasing numbers of British expats are keen to be a part of is the buying of UK property to then rent out to tenants – AKA buy-to-let.

For most people living abroad expat retirement planning needs to be thorough, and preferably carried out with the assistance of an experienced expat financial adviser. Unfortunately, unforeseeable events have the potential to derail all those carefully made plans and there is one such event that has affected nearly all British expats with equal detriment, and that, of course, is Brexit.

When an expat is faced with the question of what to do with their pension, there are several options available to them. And it's important to understand everything that could be beneficial for your pension pot because very few countries offer their citizens high standard pension systems, as shown by the latest Melbourne Mercer Global Pension Index, which ranks the pensions provided by the governments of 30 countries.

The good news is that the Index's ranking had a few standouts. Near the top of the table, coming in at number two (beaten only by Denmark), was the Dutch system, which is great for any expats in the Netherlands who are eligible to receive the country's state pension. If you've lived or worked in Netherlands, then you would have built up a Dutch state pension. The longer you have lived in the country, the larger your Dutch pension will be (you can combine it with a state pension accumulated in another EU and EEA member country).

Time may be running out for British retirees to move to Portugal in order to take advantage of its valuable Non-Habitual Resident tax programme. Currently, talk abounds that the scheme will come to an end in 2018 and be replaced with a 10% net expat tax regime from the first day of the New Year. Luckily, for those who feel they may be tempted by a move to Portugal, any move before this cut-off date will ensure that they are able to enjoy the benefits of NHR status as they currently stand.

However, it is important to bear in mind that UK QROPS, QNUPS and SIPPS pension transfers usually take around three months, so, although nothing concrete has yet been announced, time is of the essence for any person to make the most of both NHR status and any associated pension transfers.

Recently, the Financial Conduct Authority released its Financial Lives Survey 2017, which suggests that many savers lack understanding of how their pensions work. The survey gathered responses from just under 13,000 UK consumers and aimed to gain an insight into their experiences of retail financial products and services.

The FCA was concerned by some of the responses to its survey because they illustrated a distinct lack of knowledge among savers. For instance, around 13% of UK adults did not know whether they were paying into a defined benefit pension or a defined contribution pension.

The Cayman Islands is currently experiencing an exodus of overseas workers looking to leave the autonomous British Overseas Territory before it closes a loophole which currently allows expats to convert their retirement savings to cash before they leave.

The law previously allowed expats to access pension accounts of $5,000 or more once they had been living outside Cayman for six months and had not made pension contributions for at least two years.

From 31 December, 2019, it will only be possible to receive payouts at retirement age. Those who want to take their pensions early must leave the Cayman Islands by the end of 2017.