International real estate service Live and Invest Overseas has produced its annual list of the 10 best places to retire overseas. Unsurprisingly, and for the fourth year in a row, Portugal’s Algarve region tops the list, partly, it is reported, because it is possible to live comfortably on €1,400 a month.
But for many British people approaching retirement, there is a real fear that the golden age of moving overseas for a sun-filled retreat could be over as Brexit negotiations on free movement across the EU become knotty.
Of course, the concerns could be circumvented if the Portuguese and British governments manage to secure some kind of bilateral agreement, but it is likely that for British people to continue to be allowed to freely retire internationally in sought-after retirement destinations such as the Algarve, there would need to be clear flexibility for Portuguese people working in Britain.
Over 65s make up around one-third of UK expats in Portugal, and around one in five of all British expats in the EU. Fortunately, there is real confidence that Brexit negotiations will achieve a deal to protect the rights of those expats already in Portugal and elsewhere in the EU, but there is a clear imperative for the government to take action, and swiftly, to ensure that opportunities remain for those who have not yet retired and settled outside of the UK.
Managing perceptions
There is sometimes a perception that retirees – who are by nature getting older, perhaps more reliant on health services, and often no longer paying income tax – might place a burden on the national finances of countries such as Portugal but, more often than not, this view is based more on prejudice than reality.
European countries have derived huge benefit from Britons buying property and encouraging exciting developments in locations that otherwise would have been bereft of investment. Plus, retirees spend money in shops and restaurants and, in many cases, are actually creating the demand for new businesses. This is all good news for local economies. And because so many UK expat retirees have benefitted from intelligent and foresighted wealth management planning, they often have money to spend on the kinds of luxury items and big-ticket purchases that can have a real impact on an economy.
It would undoubtedly constitute a huge loss to countries such as Portugal if they missed out on the opportunity to share in the wealth of some of the UK’s best-prepared retirees.
A feeling of urgency
Those who have reached or are approaching retirement age are increasingly making enquiries as to how they can organise their wealth, assets and pensions with a view to moving to the EU, whether the destination is Portugal, Spain or France.
Wealth management and pension transfer firms report that in 2017 there has been something of a rush to get out of the UK, with retirees feeling they must scramble to take action before Brexit begins to bite. Many have even seen a surge in the numbers of clients who are looking to retire early, simply so that they can be assured of achieving their personal expat dream.
But rushing things is not necessarily going to be the best answer, however reassuring it might feel for retirees to take swift action. A major move such as this cannot be done without first receiving advice around the three major concerns of expat retirees: residence, healthcare and pensions.
Any relocation that is made without sufficient planning is riddled with risk, not only in terms of tax and asset management problems but also in terms of pension laws, as these can vary from country to country and in some cases unsuspecting pensioners can find themselves falling foul of unexpected technicalities.
Getting the right advice
Unfortunately, a significant number of retirees moving to Portugal and elsewhere in the EU do not sufficiently understand the importance of getting both pre- and post-move advice right. Taxes, finances and property arrangements need to be properly organised and, for all but those who have a background in wealth management, this requires specialised advice.
Sadly, not all so-called specialists operating among expat communities are competent enough in the really complex areas and all too often legitimate firms have to pick up the pieces left behind as a result of unregulated and opportunistic firms praying on the uninitiated. Such firms tend to be sales-led and tend to employ advisers without meaningful qualifications who typically recommend high-commission investment vehicles.
The number one recommendation for expats is to always check a firm’s credentials to be sure you are in safe hands.
Experience is key
Blacktower has been providing financial advice to its clients in the UK since 1986 and to expat clients since 1996 when it opened its first non-UK office in the Algarve.
The firm provides independent services related to wealth management, tax planning, pension planning and more. Its advisers possess many accreditations and memberships, including the Federation of European Independent Financial Advisors (FEIFA), the Portugal British Chamber of Commerce, the Gibraltar Insurance Association and more.
Contact the Blacktower team today, either in our Algarve or Lisbon office, so that we can assist you in your financial and investment strategy planning.
By Manuela Robinson
Manuela Robinson is Joint Country Manager for Blacktower Financial Management (International) Ltd, with offices in Quinta do Lago and Cascais.
[email protected]
289 355685 | www.blacktowerfm.com
Blacktower Financial Management (International) Limited is licensed in Gibraltar by the Financial Services Commission Licence 00805B. Blacktower Financial Management Limited is regulated in the UK by the Financial Conduct Authority.
