Retiring abroad is no longer a feasible option for any but the most wealthy, Blevins Franks Financial Management has warned.
Following the departure of the UK from the European Union, clients will be expected to fork out additional costs to secure their right to relocate abroad.
This means that the prospect of retiring abroad to sunny Costa del Sol has become the “preserve of the above-average wealthy", according to Jason Porter, director at Blevins Franks.
Porter said highlighting hidden costs to your clients would therefore be even more essential post-Brexit. Not only will more documentation be required, but also these documents may also need to be translated, depending on the destination country.
“Get the residency application wrong and in most cases it is void and the application is lost", Porter said.
While many Brits of retirement age may have had the goal to retire abroad, the changing political and economic context following Brexit has re-shaped retirement planning.
Therefore, according to Porter, paying attention to detail is crucial with residency applications, as clients must be able to provide adequate proof of income in order to demonstrate their qualification status for residency.
There are also different tax regimes in place; some more favourable than others for would-be expats. For example, Greece has designed a 7 per cent tax rate for foreign pensioners.
This low tax rate has acted as an incentive for Brits to transfer their permanent residency to Greece and bolster the Greek economy by spending.
As reported by FTAdviser in February 2019, the number of British pensioners living in the EU fell by 6,110 to 468,790 in 2017-2018, when compared with figures from the previous year.
This trend has continued, according to figures by the Department for Work and Pensions (DWP), and represents a move away from years of migration to the EU for pensioners.
At the time, Martin Bamford, chartered financial planner and managing director of Informed Choice, commented: “If you decide to retire abroad, make sure your financial plans fully support the decision and you have a suitable exit plan should the local political or economic situation suddenly change.”
Joy Brooks-Gilzeane is an intern with FTAdviser
