UK expat pensioners living in EU drops to five-year low UK PENSIONERS living in European Union (EU) countries has fallen to its lowest level in five years according to figures from the Department for Work and Pensions (DWP). The fall has followed years of migration of UK expat pensioners to the EU. The number of UK pensioners living in EU countries has fallen by 1,900 in recent years, to a low of 466,920. The country with the largest fall of UK pensioners over the last year was Spain, where the number go retired expats fell by 1,590 to 105,206, accounting for 80 percent of last year’s total fall. Analysis from easyMoney details that as a third of all UK expatriates in Spain are over the age of 65, access to healthcare could be crucial.
UK citizens in Spain (and other European countries) currently have access to free healthcare under an EU agreement. However, if Spain and the UK cannot reach reciprocal agreements this may stop.
Some studies rank Spain as a better retirement destination than the UK, when looking at factors including crime, house prices and cost of living.
For example, average rents in the UK are 37 percent higher than in Spain, with a basket-worth of groceries costs 21 percent more in the UK, according to data from Numbeo.
Other popular expat hotspots have also seen large declines in their number of UK pensioners. Italy has seen a fall of 1,218 and Cyprus has seen a drop of 765.
As easyMoney detailed, the fall in the value of the pound since the Brexit vote has increased the cost of living in the Eurozone.
The size of the windfall pensioners can generate by selling a UK home and buying in places like Spain and Italy has shrunk.
However, that weakness in sterling is now stabilising, meaning a move to Europe could still be a viable option.
As Andrew De Candole, CEO of easyMoney details: “Continued uncertainty related to Brexit seems to have reversed the flow of British expats to Europe but it can still be a very attractive move “Selling a modest house in a UK city can allow you to trade up to a villa with a pool in many European countries. However, sterling has been volatile and healthcare costs in Europe are uncertain “That means that those considering retirement need to ensure their investments and savings stretch further in their retirement”
Despite the uncertainty surrounding the transition period that will follow the UKs departure from the EU, expats living in the EU can be reassured that their state pension payments are secure. The government have detailed that, as it stands, there will be no changes to how state pension is received if you live abroad.
State pension will continue to increase for those living in the European Economic Area (EEA), Gibraltar, Switzerland or countries that have a social security agreement with the UK (excluding Canada or New Zealand).
For those claiming state pension within these areas will still have their state pension rise in line with the “triple lock” system, ensuring an increase each year by the highest of either 2.5 percent, average earnings or the rate of inflation.
Anyone living outside of these regions will not receive yearly increases. For anyone unsure of whether they are in a qualifying country or not, they can contact the International Pension Centre (IPC) for assistance. The IPC can be contacted by email, telephone or using an online enquiry form.
The qualifying rules for claiming state pension abroad are similar for those who remain in the UK. State pension can be claimed if enough UK National Insurance contributions have been made.
An individual must be within four months of State Pension age to claim. The current state pension age is 65 but this will rise to 66 in October. If someone only lives abroad for part of the year they must choose which country they want their pension to be paid in. It cannot be split between countries.
The payment will come through every four or 13 weeks based on your preference. However, it is important to understand how using a foreign bank can affect your payments. The payment will be paid in the local currency and as a result of this, the amount could be affected by exchange rates. The volatility of British sterling should be kept in mind.
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