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New research from the online pension provider, PensionBee, uncovers the nation’s international retirement ambitions, delving into the motivations and fears of aspiring expats.
Surveying UK citizens who plan to retire abroad, PensionBee reveals almost half (47%) of respondents feel inspired to retire overseas in the future as a result of the introduction of COVID-19 travel restrictions. Being unable to travel freely today has motivated future retirees to travel more in later life – with 46% of those surveyed deciding to spend their golden years abroad within the past five years.
For the majority of respondents, the most popular motivation for retiring overseas is to have a better standard of living (65%) and to experience a different culture and country (65%). Other factors include better weather (64%), property being more affordable (55%), lower taxes (35%) and better healthcare services (31%).
Yet, despite strong motivations behind retiring abroad, concerns around accessing pension savings when overseas appear to be widespread. Each generation has been left with some doubts, but none more than Millennials (24-40-year-olds). Three-quarters (75%) of this generation fear they won’t be able to access their retirement funds in another country without incurring extra fees or delays – 72% of Generation X (41-54-year-olds) and 65% of Generation Z (18-23-year-olds) also share the same worries.
Due to these concerns, the majority of aspiring expats (66%) reported that they have saved or will save more towards their pension pot as a result of wanting to retire abroad. Unsurprisingly, the generation closest to retirement has the largest value savings pot, with almost the same amount of savings (£39,595) as Generation Z (£18,918) and Millennials (£25,227) combined. However, there are some notable variations across the nation. At opposite ends of the spectrum, 12% of respondents said they didn’t have anything saved towards their retirement overseas, whereas another 12% had between £80,001 – £100,000 put aside – more than double the average pension pot across each generation.
While putting together a strict saving plan (50%), increasing workplace pension contributions (51%) and investing (54%) remain some of the most popular ways for people to save for their retirement abroad, some generations are opting for more creative methods.
Just under half (49%) of Generation Z are operating a side hustle or a second job to help fund their retirement overseas. In contrast, over half of Millennials (52%) revealed they have already begun cutting out small expenses to help save for their dreams of retiring abroad.
Romi Savova, CEO at PensionBee, commented: “Moving abroad and managing a UK personal or workplace pension can seem like a daunting prospect, so it’s encouraging to see that future expats are already thinking about how they need to prepare financially. Circumstances such as pension drawdown fees, fluctuations in exchange rates and living in a post-Brexit world perpetuate the need for savers to thoroughly research their dream retirement destination before making any firm decisions. This can help ease concerns around the cost of living abroad and the accessibility of a UK pension once a saver has started their retirement outside the UK.”
Top 10 destinations Brits would like to retire to
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