Retirement planning mistakes made by expats

Types of Pension Plans


Moving overseas and starting a new life as an expat in an exotic location is exciting. The first few weeks or months are a honeymoon period and the thrill of exploring a new home is enthralling and sometimes expensive as you act like a tourist rather than a seasoned Brit abroad.

It’s worth setting a few minutes aside to give your finances a MoT. Ideally, money should be sorted out before leaving the UK, but it’s easy to overlook under the welter of other things on an expat’s mind, such as starting a new job, finding a home and saying sad goodbyes to relatives and loved ones.

To jog your memory, here are five of the most important financial matters you need to sort out:

Putting aside for a pension

Expats earn more and can pay less tax compared to living in the UK, but somehow that extra cash seems to fritter away leaving many with little or nothing as savings. Pensions are not problems. They are simply a way to save some money from today to finance your lifestyle in the future, so use the opportunity.

Don’t forget about tax

You may be in a zero or low tax place for a while, so use that money for savings. Check out your tax status as well. You may need to take advice where you live to get this right. The tax authorities in most developed nations are swapping financial information on savings and investments controlled by non-residents, so do not fall foul of the law.

Don’t get in a state over your estate

Make a will in every country where you have cash, property or investments as the rules on inheritance will differ and you need to make sure your legacy ends up with the people you want to benefit. It can help avoid any lengthy delays in settling your estate upon your death.

Look out for scams

If you have wealth, someone else is looking to trick you out of it, so watch out for scammers trying to persuade you to put money into harebrained schemes. You wouldn’t do it at home, so why should you fall for their patter as an expat?

Make sure you benefit as an expat. Expat tax benefits generally only apply when you become resident in another country. Find out what rules apply to you and make sure you stay within them, particularly if you return to the UK frequently.