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Kindly be informed that MM2H Centre has discontinued the reduction of Fixed Deposit placement based on property purchase worth RM1 million and above in Malaysia. Also discontinued is the MM2H...
Where Can You Afford to Live Abroad in Retirement with a Weak Pound? Print E-mail
Thursday, 11 March 2010 02:34
As part of our week long programme of articles and reports for the 42% of over 55s in the UK who are reportedly thinking about moving abroad pre or post retirement, today we’re going to be focusing on where you can afford to live abroad in retirement with a weak pound in your pocket.

Until just a few years ago we Britons were fairly blessed, we had a healthy currency and plenty of equity in many of our homes that we could cash in and turn into bricks and mortar anywhere abroad.  Now the tables have really turned in a dramatically negative fashion.  Many of us are restricted by a weakened currency and have little or no cash to play with in our properties because no banks are lending – and the only way we can release equity is to sell in a stagnant and deflated market.

In their survey of over 55s, the Foreign and Commonwealth Office determined that 42% were actively keen to move abroad – but money matters could hold them back.  However, as we are about to reveal, you needn’t put your life plans on hold just because the pound is no longer riding high.  There are places in the world where you can afford to live, and there are ways you can afford to move abroad and live elsewhere in your retirement…

Look Beyond and Outside the Eurozone

If you have your heart set on living in Spain or you’re determined that France is where you are going to retire, this article is not for you.  This article is for those who want to move abroad and afford to live well with a weak currency in their pockets.  The pound is wallowing in deep dark depths against the euro and highly likely to remain in this stagnant position for a number of years to come…this simply means that anything we purchase in euros with our weak pounds is so much more expensive, relatively speaking.

If you want to get more for your money – or at least experience a fair swap, you need to look beyond and outside the eurozone when it comes to moving abroad…

There are countries in the world where neither the pound nor the euro factor – think about Northern Cyprus is you still want to be in Europe, or Turkey if you want an even shorter flying time for the UK.  Both countries have the Turkish Lira as their currency, with Northern Cyprus becoming increasingly popular with well off Brits who would love to live in the glorious sunshine and beautiful landscape that the nation boasts, but who do not want the over inflated euro prices charged in Southern Cyprus!  In fact, Northern Cyprus is all about having your cake and eating it.  You live in Europe, have all the benefits of a first world trading nation across a border, but you live in an affordable tax haven where the quality of life is exceptional!  And all the BS you read about ongoing issues between Greek and Turkish Cypriots needs to be experienced so that you can just discount it…it is irrelevant to your lifestyle – go to Cyprus, try it for size!

If you prefer it, Turkey might suit you if you want to be living in a country that’s internationally recognised and one that’s investing heavily in infrastructure developments in a bid to up its profile and standing on the world stage.  In and around the tourism resorts the investment is tangible, but step off the beaten track and you can get even more for your money.

If you’re happier to go further afield, may we suggest Belize where the Queen still rules (!) or perhaps Costa Rica or Panama?  All are countries where taxation is minimal, the cost of living is cheap, and the standard of life you can achieve is very high indeed.  The nations are worth exploration – Belize for example has a retirement persons’ incentive programme that can allow you to live there tax-free.  Panama is very sophisticated – or you have Costa Rica where you can really have a totally tropical, amazing existence living on very little amongst the locals!

The 3 nations offer a good choice of lifestyle options, with the basic cost of living being very cheap indeed.

Still further afield you have Malaysia – with the Malaysia My Second Home Programme also allowing you to potentially live there tax-free.  Or what about countries such as Brazil or Argentina where property is as cheap as chips and the standard of living very high?

Should I Sell Up and Ship Out?

A question being increasingly asked is whether would-be expats in the UK should sell up in Britain before moving abroad.  It used to be the case that the housing market was so buoyant and house prices so high that it was a no brainer to sell and run with the cash!  Nowadays the situation is different.  The situation as it stands is that house prices are falling – because the value people are willing to pay has shrunk in part because people just can’t get the mortgage levels they once could from the bloated and bailed out banks.  This means that people are reluctant to sell.  What’s more, there is a lot of uncertainty in the UK now, and this is passed on to people moving abroad and they are more reticent about leaving and what they will find.

So, our advice would always be to move abroad and rent a property if you possibly can – either leaving your home in the UK empty for you to return to if you decide you don’t like living abroad, or rented out so that you earn an income from it.  This gives you the best of all worlds situation that you can possibly hope to achieve.

Firstly you’re not committed to a home abroad that you cannot sell should you decide you want to relocate overseas again or repatriate.  What’s more, it gives you the chance to really get to know your new nation, and where abouts within it you would most like to make a home.  Next up, your home in the UK remains available to you should you decide you don’t want to remain overseas.  You can rent it out and earn an income from it to fund your rental property abroad…also, you’re not selling it at the bottom of the market.  Furthermore, if prices do ever rise or you do decide that you want to remain overseas, you can then sell it at your leisure, rather than in a mad dash before you leave to start your new life abroad.

Making Your Money Go Further Abroad

There are ways you can make your money go far further abroad.  For a start you need to look at your exchange rate options and alternatives.  You will be earning an income in pounds probably, and then transferring that into the currency you operate in on a day-to-day basis.  If you do so through your usual account, you will be losing out as banks will charge you a fortune on international withdrawals.  Perhaps it would make more sense to fix your rate of monthly exchange with an FX broker, and have them handle a one off monthly lump sum transfer abroad.

Perhaps an international bank account from the likes of HSBC would make managing your money easier and more cost effective?  Or maybe you would be better off moving your savings and investments offshore to minimise taxation where possible depending on your personal circumstances, and maximising your exposure to better returning investments and savings.

As an expatriate there are certainly many benefits potentially available to you when you ‘internationalise’ your money matters.  So, seek advice before you go, or as soon as you move abroad.  Get in touch if we can assist you.

In Conclusion

You can still move abroad and have a fantastic, sun soaked lifestyle for less than you pay to live in the UK.  You just have to be aware that the pound is not as strong as it once was, and whilst it may well one day bounce back, you cannot depend on it doing so, you have to secure your lifestyle at today’s exchange rate and prices!

Look away from the euro and even the dollar, factor in renting abroad rather than buying a property immediately, consider how you can make what money you do have work harder, look at legal ways to minimise your tax burden and exposure, and never give up on your dream of a better life abroad.


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