Assetz® News - Brits dream of owning an overseas property

Brits dream of owning an overseas property

21st June 2006 |

Soon-to-be retirees in the UK are no longer looking forward to a life of slippers and Countdown, with around 50 per cent instead planning to travel the world.

While an afternoon in the company of Des Lynam and Carol Vorderman may still appeal to some, new research indicates that a third of those approaching retirement actually hope to leave the country and live in a property in the sun.

In addition to those planning to travel the world or invest in a property abroad, ten per cent of workers are hoping to spend their time skiing. The term SKI, however, has also become an acronym, in reference to a new generation of retirees who will Spend their Kids' Inheritance on living out their own dreams.

Property investment is certainly an attractive option for Brits, with many looking forward to escaping the rat race for a more relaxing life. Whether this involves purchasing a property among the vineyards of Languedoc or by a golf course in Murcia, there is no doubting the fact that retiring abroad is still seen as the ultimate dream for millions in the UK.

But the reality is often extremely different, with poor financial planning leaving many left disappointed when they eventually stop working.

The research from engage Mutual Assurance has compared the expectations of those preparing to retire with the facts from those who have been collecting a pension for the last few years. Less than half of those aspiring to travel will actually go overseas during retirement and only seven per cent of those planning to buy a property will actually manage to do so.

Karl Elliott, a spokesperson for engage Mutual Assurance said: "With people living longer, retirement is becoming a time when we look forward to new experiences, learning a new skill and relaxing with family.

"However, with the average state pension currently paying £82.05 a week, financial limitations often prevent Britons from fulfilling their more adventurous aspirations in retirement."

Mr Elliott suggested that retirement savings now need to involve more than just the traditional pension and he advised saving little and often. He also advocated the use of tax-exempt opportunities with ISAs and Guaranteed Equity bonds.

In an article in the Telegraph, John Greenwood cites figures from the Department of Work and Pensions showing that more than one million Britons now have their pensions paid overseas. The statistics reveal that 74,000 of these are in Spain, which compares to just 26,700 a decade ago, reflecting the boom in overseas property investment in the last few years.

But Mr Greenwood has advised those seeking a property abroad that "setting up your finances properly is as important as choosing the right villa". He advises buyers to take into account issues including taxes, pensions and currency risks as well as varying rules on inheritance tax.

It is perhaps because of a failure to take these factors into consideration that so many Brits are finding that they cannot realise the dream of living abroad once they reach the retirement age.

Living costs on the continent are often much cheaper than in the UK, however, meaning that those who can successfully clear the first hurdle actually tend to save money rather than fritter it away once settled abroad.