What does Brexit mean for the dream of retiring abroad?

Is now the time to look further afield for retirement sun?

Many of us dream of retiring abroad where the sun shines more regularly but our post-Brexit vote world has raised many questions about buying a retirement property in the EU.

With the struggling Euro, does it make financial sense to look further afield than Europe to buy a retirement property? What countries offer good value when it comes to currency and lifestyle? For those with properties already in the EU or with plans to buy there, can a UK pension still be claimed if the UK is no longer part of the EU? What else needs to be considered for those planning to retire abroad?

We investigate these questions and other likely considerations for those planning where to spend their retirement.

Your Spanish dream may be over, but your Brazilian one could be real!

Sunshine, sea and sangria, walks on the beach or alfresco dining on long balmy evenings – whatever the reason, thousands of Brits every year choose to live life like a permanent holiday by retiring abroad.

After succumbing to 40-odd years of computing and commuting, raising a family and paying off the mortgage, retirement has long seemed like a journey to the Promised Land.

And then Britain voted for Brexit.

Whether you voted In or Out, there is little question that voting to leave the EU has already had a seismic impact on the political landscape of Britain – and on our personal finances.

Like the Mediterranean tide, the vote result swept in during the early hours of 24 June, leaving a trail of indecipherable detritus on our shores. And we’ve been left to pick up the pieces like a flock of ravenous seagulls.

Among those scavenging for precious stones that might turn out to be shards of broken glass are Britain’s expats – and those with dreams of following them to a new life in the sun in their autumn years.

The big three

Pensions, healthcare and inheritance are the prime issues for those thinking of retiring to countries within the Eurozone. With all the uncertainty casting doubt over the safety of our pension pots, has this started to put people off, or at least delay their plans until the dust has settled on Brexit?

So far, British fortitude (or our uncanny knack of burying our heads in the sand) seems to have prevailed. Martin Dell from www.Kyero.com says: “We’ve been watching website traffic to our site with great interest over the weeks since the UK elected to leave the EU. I would not have been surprised if there had been a decline in visits but we are delighted to report that it is business as usual.

“There have been no spikes upwards or downwards, just a continual steady flow of enquiries, with the major resorts still seeing excellent levels.

“There are still many bridges to cross for the UK but buyers’ continued interest in Spain is typical of the British keep calm and carry on attitude that is so familiar.”

A pound for pound struggle

European countries like Spain, Greece and Italy were hit particularly brutally by the global recession, but this hasn’t dampened many Brits’ dreams of setting up camp amid white-washed tavernas and trailing bougainvillea.

Alas, with the pound struggling against the Euro since the vote, this could be set to change. The pound isn’t looking too clever against the mighty dollar either, so although a move to sunny Florida or health-obsessed California may mean you can throw away the statins, you’re likely to get a smaller Buick for your buck.

Wait a minute, you cry – we’re not talking a quick cheapie break in the sun here – this is my dream, what I’ve worked 40+ years of blood, sweat and spreadsheets to achieve. And God help any Eurocrat that’s going to get in my way!

So, what to do about it? The dream of retiring to a Spanish villa may be on the rocks, but could it mean you just need to dream bigger?

According to Expatica, the most popular place for the total 4.2million Brits who have emigrated is Australia, with 1,289,396 expats. But, according to long-term exchange rates, until the pound bounces like a demented kangaroo, Brits aren’t getting much against the Australian dollar – just 1% more than in 2013.

Top 10 most popular destinations for British expats

  • Australia - 1,289,396
  • USA - 714,999
  • Canada - 607,377
  • South Africa - 318,536
  • Spain - 308,821
  • New Zealand - 265,014
  • Ireland - 254,761
  • France - 185,344
  • Germany - 103,352
  • Italy - 64,986

The first European country on the list – Spain – is ranked fifth most desirable place for Brits to emigrate, with 308,821 expats. Ireland, France, Germany, Italy and Cyprus also feature highly on the list, but all are in the Eurozone, where our beloved sterling doesn’t get us as much gelato or as many baguettes and Bratwurst as it used to.

As the pound continues to weaken against the euro and dollar, those looking to retire abroad could be wise to look further afield – to more exotic countries like Argentina, Brazil and South Africa. Arguably places much more deserving of the term “dream destination”. And certainly deserving of the “better value” price tag.

In the middle of August, this is how far your pound would stretch overseas…

Brexit Pound Exchange Rate

Long-term exchange rates show that even though rates have worsened in the short-term since the Brexit vote, the pound buys a gaucho-stepping 122% more in Buenos Aires than it did in 2013, with 5,336 more Argentine pesos (equivalent of £275) for every £500 spent.

With its rich cultural heritage, fine weather, delicious food, stunning scenery and beautiful people, who wouldn’t want to live out their days in the land of the tango? And if you’re Welsh, you can even move to Patagonia, where they all siarad Cymraeg.

Those who soaked up the Rio carnival vibe of this year’s Olympics would do well to lay down roots there, as the Brazilian Real is now worth 13% more today than three years ago.

South Africa – which ranks above Spain in fourth place as a favourite for les emigres – is also a fantastic option for those seeking a retirement in sunnier climes, surrounded by breath-taking scenery. And the locals speak the same language too, as well as Afrikaans, so no need for six months of Rosetta Stone or semaphore to make yourself understood.

Brexit may have thrown us all into a period of deep uncertainty, but the one area where we Brits tend to excel is in making the best of things – or, in Brazilian terms – making something incredible out of very little.

And after all those years of toil and trouble, don’t you deserve to dream big in your retirement?

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