How to retire back in the UK after living overseas
If you’re a British expat and have lived overseas for a number of years, then it’s quite possible you are considering soon retiring back in the UK.
Whether this is the right or wrong choice is a very personal matter, and different for everyone. On the other hand, what everyone needs to consider is the fact that the UK will have changed a lot from what you remember.
There will be new rules, laws and procedures to take into account, all of which could affect you to a greater or lesser degree – depending on the specific area of your life, as well as your own specific circumstances.
Hebden Consulting is an independent financial adviser working with UK expats, particularly those in South East Asia. In this article, we’re going to share some tips and information to consider for UK nationals who are thinking about retiring back in the UK.
This article is for information purposes only, and should not be taken as financial advice. We cannot cover every possible aspect of this important subject here, so neither should this post be taken as comprehensive information. To receive financial advice for your specific goals and circumstances, please speak with a financial adviser with experience in UK expatriates.
Moving back to the UK: permissions
Before you move back to the UK, you should, of course, ask yourself: “Am I allowed to move?”
For most British nationals, the answer will likely be yes. However, there are situations which might prohibit you or make the move more complicated.
For instance, if you are no longer UK domiciled then you will face far more barriers and restrictions compared to a domiciled person.
Practical considerations
Other important questions to ask yourself include those surrounding income and costs of living.
In particular, will you still receive your current income when you move back to the UK? If you are currently employed as a teacher at an international school in South East Asia, for instance, then you will obviously lose your salary and need to consider how/whether you will replace it.
You also need to consider the price differences between your two countries. For example, if you currently live and work in Vietnam but want to retire back in the UK, then your food and petrol bills are likely going to go up significantly.
One other crucial thing to think about is how you will transfer wealth back to the UK, if you have assets currently tied up in your country of residence. If you own property in South East Asia, for instance, do you plan on keeping it when you move back to the UK and retire? If so, how will you receive the rental income?
Or, if you plan on selling it before moving home, what are you planning to do with the money you receive from the sale? Will you be able to easily transfer it into a UK bank account? Is that even the right course of action for your particular financial goals and situation?
Think also about your insurance. Many UK expats enjoy private medical and travel insurance as part of their employment package whilst working overseas. Will you still have access to these benefits when you move back to the UK? If not, does that matter? Could you easily replace these benefits with other arrangements if you still needed them?
Consider your pension(s)
A very important area to think about before retiring back to the UK is your pension, especially your state pension.
Many British expats have lived overseas for a number of years – even decades. As a result, lots of people have not been making national insurance contributions during that time.
This can massively impact your state pension entitlement when you eventually retire. In 2019-20, you need 35 qualifying years of national insurance contributions to receive the full state pension. If you have missed on some years due to your time spent overseas, then it might be possible to top this up by making voluntary national insurance contributions. However, you should speak with a financial adviser before making any big financial decisions.
You should also think about any pensions you have contributed to during your employment as a British expat. If you have worked at a large financial institution during your time working in Singapore, for instance, what will happen to your occupational pension if you move back to the UK? Will you be able to easily move money into a UK bank account? What fees might you face?
Pensions are some of the most complicated assets to sort out when looking to retire back in the UK after a long period of time overseas. We highly recommend that you contact one of our independent financial advisers here at Hebden Consulting to ensure you ascertain all of your options and make the most informed, best decision available to you.
Other considerations
We cannot possibly cover everything here, but there are some other important areas you need to think about when considering retirement back in the UK as a British expat:
● Benefits. Will you be entitled to any UK state benefits when you move home, such as Pension Credit or Council Tax Reduction? If so, how do you apply for them and how might these benefits affect your financial plan?
● Care. If you want to retire back in the UK and plan on moving into a care home, then this can be difficult to sort out whilst living overseas. To gain access to social care in the UK, you normally need to be able to prove that you are an “ordinary resident” – something that is obviously quite hard for a British expat to do! You should therefore have a Plan B ready, just in case things don’t work out the way you would like. It might be possible to arrange private care home accommodation in the short term when you move home, for instance, whilst you establish your ordinary residence and then move into care provided by the local authority.
The information is provided in good faith without any warranty and is intended for informational purposes only. It does not constitute investment advice, recommendation, or an offer of any services or products for sale and is not intended to provide a sufficient basis on which to make an investment decision. For further details see our Regulatory Statement.