Offshore - or off the grid?

Offshore - or off the grid?
08 May 2013

There are several retirement options available to you, whether you are planning to stay offshore when you retire, or return home. However retirement planning is something that many people struggle with and if you are living offshore, you certainly have more choices but this can often add to the confusion. As a result, many people put pension planning off. The trouble is, one minute the idea of retirement seems so far away that it doesn’t matter, then, by the time you think about it again, you may feel that you are so close to retirement that it will be impossible to save enough to enable you to live comfortably, so you give up and do nothing.

Many people find that major life events whittle away any spare cash that they do manage to save towards retirement. Typical ‘savings eaters’ include buying a house, having a baby, paying for weddings, and university. This is why it makes sense to take advice on planning for your retirement as soon as possible. An experienced retirement planning advisor will understand the impact of such events on your offshore pension contributions, and will help you plan accordingly.

Whatever you decide to do, it pays to begin planning your retirement right away if you want to live comfortably in your final years on earth. According to a recent survey by HSBC, the average person expects to spend 15 years in retirement, yet they only have enough saved to live nine years. With advancement of medical science, people will be living a lot longer than they anticipate and will have a rude awakening as they approach retirement as they see the world has changed and people’s lives being extended with stem cell technology or whatever is around at the time….

Risky business

So why do so many people put themselves in such a potentially dangerous situation?

According to HSBC, for many people the stability of the economy and a lack of understanding in investment and savings is a major deterrent. Their study found that many people did not trust financial planning services. Yet those who used professional financial planning services had more than double the annual retirement income of those who failed to plan properly.

So it is clear that fears and perceptions of using a financial professional do not match reality, and by seeking expert advice on retirement planning now, you could double your retirement income.

Checking the options

There are several retirement options available to you whether you are planning to stay offshore when you retire, or return to the UK. Not every option will be right for your circumstances though, so it is essential to take expert financial advice to make sure you find the right solution for you.

There are so many things to consider when you are planning your retirement that you shouldn’t just leave it to chance. In recent years, changes in exchange rates have affected many expats. Your retirement income can also be impacted by inflation which is one reason why you should not rely on bank account savings when you retire. Interest rates have been low for several years, making it unlikely that money saved in the bank will keep up with inflation, let alone surpass it.

Even with the magic of compounding, any money you save in a bank account is unlikely to be worth much by the time you retire so it is sensible to look at other options and seek professional advice from someone who has the expertise to show you how to protect your pension funds against fluctuating exchange rates, inflation and many other factors that you have even considered.

With more and more company pension schemes vastly underfunded and headed for disaster SIPPS, QROPS, QNUP’s and UK Annuities are growingly popular options, allowing you to take control of your own future.

Is there a ‘right choice?’

As you can see, there is no perfect offshore retirement choice to suit everyone. A number of factors which determine which is best for you include your income, assets, age and whether you intend to return to the UK when you retire, or remain offshore. You need to understand the investments available to you, and external factors that may affect each investment. It is also essential to have an in-depth knowledge on taxation laws in your current country of residence, and also in the UK.

It is therefore essential that you seek professional advice before making a decision on your offshore retirement options. It is the biggest investment you are likely to make, so it is imperative that you get it right.

It is obviously important that you consult a company that has expertise in all areas of offshore pensions, to avoid receiving bad advice so make sure that you seek the advice of a professional company that specialises in offshore retirement, has a thorough understanding of all pension options available to you, tax issues overseas and in the UK, and inheritance tax planning.

Do you have any advice for those planning their pensions?  Perhaps you are one of those people who is avoiding thinking about the future. Either way, we'd love to hear from you.


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