OTHER CONSIDERATIONS

Cost of living

This is an important consideration when you are living on a fixed income. You may be attracted to a location because of its relative cheapness. However, you should not assume that prices will remain low forever, especially if an area undergoes extensive development as has happened on the Spanish costas.

It is a useful exercise to look at prices in local shops and work out how much it would cost to live in the area. You also need to investigate the cost of electricity, water and the telephone, and find out what taxes you will have to pay. Try to get hold of a cost of living report – from the Embassy of the country itself, the local British consulate, the Women’s Corona Society or an expatriate self-help organisation.

You may well find it hard to generalise about prices. Some will be higher than in the UK, especially imported goods; local products will normally be cheaper. If you aim to lead a lifestyle identical to the one you led in Britain, you may find that living is far from cheap; but if you modify your tastes to accommodate local practice, you will make a considerable saving. Abandon pickled onions, porridge and pork pies in favour of pizza, pasta and paella on the Mediterranean and you will make substantial savings.

Climate

The idea of sunshine all year round may sound attractive, but is this really what you want? Many people enjoy the change of seasons and might find living in the tropics somewhat monotonous. There may be unpleasant features in the climate of your favoured location which you may have overlooked (eg dry winds, excessive humidity, occasional hurricanes).

You need to consider your health. For instance, will you suffer from respiratory problems if the climate is too dry or too wet, or if the atmosphere is too rarefied? Is your skin sensitive to prolonged exposure to the sun? If you have any doubts you should consult your medical adviser before you go any further.

The climate charts in this book will give you an idea of what to expect in various locations around the world. Many of the places mentioned are not very much above sea level, and you need to bear in mind that nearby locations at higher elevations (say, 1,000m above sea level) may be cooler in summer and colder in winter.

While temperature and hours of sunshine will doubtless be of greatest interest, the other information on rainfall and humidity is also relevant. Low rainfall plus high temperatures could mean an arid landscape at certain times of the year. High temperature and high humidity make for an oppressive atmosphere.

Currency fluctuations

How strong is the currency of the country where you wish to settle? Bearing in mind that the pound can fluctuate in value against other currencies, this is important for anyone whose pension is paid in sterling. When the pound is strong you will feel like a millionaire; when it is weak in relation to other currencies your money will not go so far.

In the early 1990s British pensioners living on the Continent experienced a loss of income when the pound was devalued against other European currencies, but more recently they have benefited from a much stronger pound. If, as anticipated, the UK eventually adopts the euro, currency fluctuation in Western Europe should become a thing of the past, but it is an issue which you should not ignore in countries further afield.

Consider the USA. If the pound is worth $1.80, living in the USA is relatively cheap for anyone whose income is in sterling. If the pound drops to $1.50 your pound will buy 20% less. This is why if you decide to retire to a country with a strong economy, it may be prudent to have your savings in a number of different currencies, rather than keep all your cash in a sterling account.

Cost of property

Some areas are more popular than others and this is reflected in the price of properties. If money is no object you will be able to think in terms of a villa in Cannes or St Tropez; otherwise you would do better to explore areas which are less popular or which have yet to be discovered.

However, the purchase price is not necessarily the end of the story. There may be extra costs to consider; purchase tax, maintenance costs, local taxes, etc. If you opt for a flat in a complex with a swimming pool and gardens, for instance, there could be a hefty service charge to pay which might increase over the years without a corresponding rise in your personal income.

There is a firmly held belief that property is a good investment which always appreciates in value, but you cannot count on this happening. If the property market is booming, you may be lucky enough to sell at a considerable profit, though in some countries you may have to pay capital gains tax on the sale. When there is a slump in house prices you may find that you do not recoup your initial outlay on your residence.

Amenities

In the UK even the smallest village can boast a piped water and electricity supply – and often mains sewage and gas as well. However, you cannot count on having all these amenities in some of the more isolated regions of Portugal or on a Greek island, for example.

RAINFALL CHART
(Average monthly precipitation in millimetres)
	JAN	FEB	MAR	APR	MAY	JUN	JUL	AUG	SEP	OCT	NOV	DEC
UK: London	54	40	37	37	46	45	57	59	49	57	64	48
Andorra	34	37	46	63	105	69	65	98	81	73	68	69
Australia: Sydney	89	102	127	135	127	117	117	76	74	71	74	74
Austria: Salzburg	76	64	71	91	130	167	195	166	109	82	71	64
Bermuda	107	87	109	106	114	97	112	143	146	162	116	114
Canada: Toronto	66	58	66	66	71	63	74	61	66	58	63	61
Canaries: Lanzarote	28	19	16	7	1	1	0	1	5	5	23	26
Cyprus: Nicosia	90	52	36	16	13	4	1	1	3	33	49	106
France: Marseilles	43	32	43	42	46	24	11	34	60	76	69	66
Greece: Athens	62	37	37	23	23	14	6	7	15	51	56	71
Ireland: Dublin	67	55	51	45	60	57	70	74	72	70	67	74
Italy: Rome	71	62	57	51	46	37	15	21	63	99	129	93
New Zealand: Christchurch	59	43	48	48	66	66	69	48	46	43	48	59
Portugal: Faro	70	52	72	31	21	5	1	1	17	51	65	67
South Africa: Cape Town	17	13	24	60	97	105	98	83	49	40	19	15
Spain: Alicante	20	20	18	40	31	12	4	14	46	52	36	25
Switzerland: Geneva	63	56	55	51	68	89	64	94	99	72	83	59
USA: Miami	51	48	58	99	163	188	170	178	241	208	71	43

TEMPERATURE CHART
(Average maximum daily temperatures – Celsius)
	JAN	FEB	MAR	APR	MAY	JUN	JUL	AUG	SEP	OCT	NOV	DEC
UK: London	6.3	6.9	10.1	13.3	16.7	20.3	21.8	21.4	18.5	14.2	10.1	7.3
Andorra	5.9	7.3	12.3	14.2	16.9	23	26.1	24.2	21.8	15.6	10.3	5.8
Australia: Sydney	25.5	25.5	24.4	21.6	18.9	16	15.5	17.2	19.4	21.6	23.3	25
Austria: Salzburg	1.6	3.7	9.3	13.8	18.5	21.9	23.5	23.1	20	14.1	7.6	2.7
Bermuda	20.2	19.3	20.1	21.9	24.4	27.2	29.7	30.3	29.1	26.5	23.7	21.2
Canada: Toronto	-0.8	-0.1	3.9	11.8	18.2	24.2	27.2	26.3	21.6	14.7	7.4	1.1
Canaries: Lanzarote	20.9	21.3	22.7	23.3	24.6	25.7	28.1	29	28.5	26.3	24.5	21.8
Cyprus: Nicosia	16.4	16.9	18.8	22.9	27.6	31.6	34.3	34.4	32.2	28.4	22.9	18.5
France: Marseilles	10	11.5	15	17.9	21.8	26.1	28.9	28.3	25.1	19.8	14.7	10.9
Greece: Athens	12.9	13.9	15.5	20.2	25	29.9	33.2	33.1	29	23.8	18.6	14.6
Ireland: Dublin	7.6	8.2	10.4	12.7	15.4	18.4	19.6	19.4	17.3	13.9	10.3	8.4
Italy: Rome	11.1	12.6	15.2	18.8	23.4	27.6	30.4	29.8	26.3	21.5	16.1	12.6
New Zealand: Christchurch	21.1	20.5	18.9	16.7	13.3	10.5	10	11.1	13.9	16.7	18.9	20.5
Portugal: Faro	15.3	16.1	17.5	19.7	21.9	25.2	28.2	28.2	25.7	22.4	18.9	16.2
South Africa: Cape Town	26.4	26.6	25.8	22.6	19.7	18	17.2	17.9	19.3	21	23.5	25.2
Spain: Alicante	15.7	17.2	19.1	21.3	24.4	28.3	31.1	31.5	29	24.5	20.3	17
Switzerland: Geneva	3.6	5.5	10.4	14.8	19.1	22.9	25.2	24.4	20.5	14.3	8.3	4.4
USA: Miami	24.3	25	26.6	28.1	29.7	31.1	31.6	32.1	31.1	29.3	26.8	25.1

HUMIDITY
(Average % humidity at noon)
	JAN	FEB	MAR	APR	MAY	JUN	JUL	AUG	SEP	OCT	NOV	DEC
UK: London	77	72	64	56	57	58	59	62	65	70	78	81
Australia: Sydney	64	65	65	64	63	62	60	56	55	57	60	62
Austria: Salzburg	75	69	61	58	59	59	60	61	53	68	75	79
Bermuda	70	68	68	70	73	75	71	70	71	71	70	70
Canada: Toronto	71	67	62	55	55	55	54	56	59	61	67	71
Canaries: Lanzarote	65	63	59	56	56	59	59	57	59	60	61	63
Cyprus: Nicosia	72	68	67	62	59	56	52	53	57	59	64	70
France: Marseilles	68	60	57	54	54	50	45	49	54	61	66	68
Greece: Athens	62	57	54	48	47	39	34	34	42	52	61	63
Ireland: Dublin	80	76	72	67	69	69	70	72	73	75	79	81
New Zealand: Christchurch	59	60	69	71	69	72	76	66	69	60	64	60
Portugal: Faro	72	70	72	67	67	65	62	63	66	68	70	70
Spain: Alicante	57	56	56	57	57	57	57	58	60	58	57	56
South Africa: Cape Town	52	53	52	55	63	63	63	62	58	55	53	53
Switzerland: Geneva	78	71	62	56	58	58	56	59	65	71	76	79
USA: Miami	59	56	56	56	59	64	64	63	66	64	60	60

SUNSHINE CHART
(Average number of hours of sunshine per month)
	JAN	FEB	MAR	APR	MAY	JUN	JUL	AUG	SEP	OCT	NOV	DEC
UK: London	46	64	113	160	199	213	198	188	142	98	53	40
Australia: Sydney	226	184	195	183	180	189	189	214	216	229	228	229
Austria: Salzburg	71	86	137	159	205	198	209	207	176	137	69	58
Bermuda	151	152	197	227	259	259	301	283	237	196	173	150
Canada: Toronto	77	105	139	170	220	257	287	258	198	154	85	74
Canaries: Lanzarote	202	208	245	259	296	288	301	282	243	236	187	190
Cyprus: Nicosia	180	187	237	264	334	370	389	371	322	277	227	170
France: Marseilles	131	154	191	235	278	306	353	312	247	189	140	118
Greece: Athens	121	146	179	229	277	322	369	358	283	209	144	119
Ireland: Dublin	59	71	104	151	193	180	148	152	118	98	63	49
Italy: Rome	131	124	179	212	263	275	334	301	243	189	123	111
New Zealand: Christchurch	215	182	174	143	133	116	126	145	169	187	206	194
Portugal: Faro	175	195	216	277	318	360	398	361	279	237	182	178
Spain: Alicante	182	192	222	262	307	333	362	331	252	210	180	176
South Africa: Cape Town	340	285	290	232	189	172	199	206	228	266	307	337
Switzerland: Geneva	54	98	169	206	243	269	297	266	199	131	61	44
USA: Miami	239	233	269	283	276	255	270	261	212	200	224	221

Shopping is another consideration. If you are thinking of living in a resort, bear in mind that in the off-season the area can be extremely quiet. Many shops and restaurants close for months on end and reopen only when the visitors flock back.

Public transport may be non-existent or infrequent – not only in isolated spots, but in the USA, as well. Telephones may be erratic or hard to get; and qualified tradesmen, such as plumbers and electricians, may be thin on the ground, or much less competent than they claim to be.

Health facilities

The older you become the more you are going to need medical care; this is one of those problems that you can’t escape. It is unwise to assume that everywhere you will encounter the same standard of medical care that the British National Health Service provides, though it has to be admitted that in some countries it is considerably better. If you suffer from a serious medical condition which requires constant attention, you should think twice before venturing to out-of-the-way places.

Although reciprocal health arrangements exist between the UK and a number of countries, you may need to make a contribution towards the cost of treatment, particularly if you have not reached pensionable age. In others you may discover that state healthcare is woefully inadequate and you have to fork out for private treatment. In others you may simply not qualify for state health benefits.

Even if the treatment is superb, you may find that you cannot take certain facilities for granted. For instance, not all state health schemes have facilities for convalescence after an illness or cover dental charges. This topic is treated in greater depth in Chapter 5.

Language

Do the locals speak your language or, perhaps, more importantly, do you speak theirs? Problems of communication can occur in popular retirement locations in Europe, particularly when an emergency strikes. If you are rushed to hospital, for instance, how will you cope if none of the staff can speak English?

If you are to make the most of your new surroundings it makes sense to get to grips with the local tongue. You will then be able to bargain for goods in the market, understand national TV programmes, deal with the tradesmen and make friends with the locals.

Some people get by without using the local vernacular; amazingly, an estimated 80 per cent of British settlers in Spain cannot speak a word of Spanish. However, I doubt if you will feel entirely at home in a place unless you understand the language of the majority.

It is a very wise investment to enrol for a course in the language of your adoptive country months or even years before you settle there. You will immediately see the benefit when it comes to negotiating the purchase or rental of a property there. While some interpretation will probably be needed, you will at least be able to grasp what is happening.

Cultural and organisational differences

Apart from language differences there may be differences in temperament and attitude to contend with. Southern Europeans, for instance, often have a more leisurely attitude to life than British people do, and you may get irritated if you have urgent matters to attend to and all activities grind to a stop for the siesta.. .or an unexpected fiesta.

Customs may be different: you may have to put up with noisy festivals that go on the whole night; the bureaucracy may be pervasive and inefficient – obtaining a telephone line, for instance, may take an age; and there may be all kinds of quirky laws that you need to obey. However, these are often deeply rooted practices and traditions, and a foreigner is powerless to change them. If you try, you are likely to make yourself very unpopular.

Rather than get upset because things are not organised the way they are back home, you need to recognise these differences and make an effort to come to terms with them. This means reading up about the country and its people and ensuring that you are thoroughly briefed before you go.

Taxation

This also deserves investigation. There are places, such as Andorra, which are tax havens, and others where personal taxation is higher than in the UK. Do not assume that you are exempt from taxation in your adopted country. If you have permanent residence status, the chances are that you are not, and you could experience a nasty surprise when the tax authorities finally catch up with you.

Apart from income tax there are other taxes to consider, such as capital gains tax, inheritance tax, local taxes, wealth tax, value added tax or purchase tax. As countries develop their infrastructures, taxes rise, and you cannot count on a country remaining a low-tax or low-cost haven for ever.

Immigration or property restrictions

Do not assume that the world is your oyster. There are countries that place obstacles in the way of any intending retirees from abroad. In the past many Swiss cantons have placed quotas on the number of foreign owners of property in their area. In the United States there is no restriction on property ownership by foreigners, but there is on permanent residence status.

In order to retire to other countries you may well have to meet certain financial requirements so that you do not prove a drain on the country’s resources. If you plan to retire to Australia, for instance, you will need to show the authorities that you have a substantial amount of capital.

Member states of the European Union tend to be more liberal towards the nationals of other member states. As a UK citizen you will not need a visa to enter an EU country, and you will be eligible for a residence permit of five years, renewable provided you are covered by sickness insurance and receiving a pension or benefit which is at least higher than the level of the minimum social security pension of the host country.

The basic state pension in the UK may well amount to less than the equivalent in the country you propose to retire to. This means that UK pensioners may need to demonstrate that they have sufficient additional income in order to qualify for permanent residence in certain countries.

Social life

Some people are naturally gregarious and feel happiest when they are mixing with other people of their own nationality. Others are able to live quite happily with local people without an elaborate expatriate social network to sustain them. Your lifestyle may well determine your retirement location.

The former category will prefer to be in a town, probably with a substantial expatriate community with its own churches, bridge clubs, amateur dramatic societies, etc. The latter can be more adventurous and perhaps opt for a village off the beaten track where they will mix more readily with the locals.

In the country sections of this book I sometimes indicate which areas are popular with British settlers so you will know where to look or where not to look for a property.

Your pension

Although you are entitled to receive your UK state pension in any country of the world where you retire, the amount you receive will vary from country to country. State retirement pensions often represent a major slice of many pensioners’ incomes, and you will clearly lose out if you settle in a country where your pension is frozen (ie it is not adjusted annually after your departure from the UK). This is not a problem if you are taking up residence in another country of the European Union, but British pensioners settling in Australia, Canada and New Zealand, for instance, miss out financially.

This very important matter is dealt with at greater length in Chapter 5.

Stability and security

Not every country turns out to be a secure retirement haven, and what today may seem a perfectly peaceful place might tomorrow undergo a revolution or change of government. Extreme nationalist governments may resent the presence of foreigners, and history is full of instances of foreign property being confiscated and no compensation offered.

Security is also important. While there are still places on earth where people go out leaving their doors unlocked, they are becoming fewer. In urban areas, particularly, theft can be quite common.

Accessibility to the UK

Most people want to retain contact with the UK, so proximity to an airport and good air connections can be important. Most countries offer direct flights to London’s international airports, and some have services to regional airports in the UK, too. The world has become a much smaller place.

The closer you are the more frequent your visits can be. This is one of the attractions of Europe where flights are frequent and never take more than a few hours. Thanks to charter operators and low-cost airlines, air fares to the more popular areas are fairly affordable. You also have the option of travelling by road or rail, now much speedier with the opening of the Channel Tunnel.

Another advantage of being close to the UK is that you are more likely to have visits from friends and relations living in the UK.

Which country?

You probably have a shrewd idea of where you would like to retire to. If the decision is entirely in your hands you will doubtless plump for a country with which you are familiar and where you believe you will feel at ease.

If you have a number of alternatives in mind it would be well worth using this chapter as a checklist to help you decide which one will be best for you. There are pros and cons for each one.

Currently the leading overseas retirement destinations for British people in terms of those drawing British state pensions abroad in order of popularity are: Australia, Canada, USA, South Africa, Irish Republic, Spain, New Zealand. France is one of the fastest growing locations for retirement these days, with Portugal and Italy also in the running. Other countries around the Mediterranean are also attracting retirees from Northern Europe.

European Union countries on the whole have good health services, are close to the UK and your state pension is adjusted annually, but the cost of living in some of them can be high, and unless you become fluent in the local language there could be communication difficulties. Southern Europe is not so expensive and its resorts attract tens of thousands of pensioners from Northern Europe.

In Australia, Canada and New Zealand the way of life may be familiar and easy to get used to but regular travel between the two countries and the UK can work out prohibitively expensive and your state pension will be frozen. People often move to these countries if they already have friends and relations there but there could be problems in obtaining the requisite residence visa, unless you have significant assets.

If you are well-heeled, this is not a problem, but if you are not, it would be sensible to consult a financial planning expert to see if there are ways in which you could garner sufficient funds to satisfy the authorities.

The USA is relatively inexpensive compared with some European countries, transatlantic flights are frequent and cheap, and your state pension is uprated regularly, but here too you may experience difficulty in obtaining a permanent residence permit. However, there is no obstacle to having a holiday home there where you stay for up to six months of the year.

South Africa boasts an excellent climate and is relatively cheap but your state pension will be frozen and there are lingering doubts about the long-term stability of the country. On the credit side, the amount of capital required to qualify for residence is currently relatively modest. Certain parts of the Caribbean are also worth considering if you wish to bask in a warm climate all the year round.

A number of other countries popular with holidaymakers are are starting to develop as retirement locations, notably Thailand and Sri Lanka. And there are many others beyond the scope of this book which have their attractions for those planning to retire.

FINDING OUT ABOUT THE LOCATION

Before you commit yourself, it is essential to find out as much as possible about the place of intended residence, the bad aspects as well as the good. Brochures from tourist offices and estate agents provide one half of the picture, but for a more realistic appraisal you need to rely on living conditions reports.

If you are thinking of moving to a member country of the European Union, the European Commission publishes a short guide entitled Living in Another Country plus a number of factsheets dealing with such matters as right of residence, driving licences, taxes, etc. These are available from European Commission offices and can also be accessed on the Internet: www.citizens.eu.int.

At your local library or bookshop you will find useful handbooks on living in or buying property in various countries. A selection of them are mentioned in the reference section of this book. For really up-to-date information you should subscribe to specialist newspapers and magazines. Outbound Newspapers, for instance, publishes newspapers for would-be emigrants and visitors to Australia, Canada, New Zealand, South Africa and the USA, and there seem to be several glossy magazines about France and Spain.

However, where feasible, you also need to conduct your own thorough reconnaissance, visiting the place(s) you have in mind in order to find out from local residents how they cope and what kind of snags they come up against. A visit to any British consulate in the area might also be a sensible idea; many consulates are happy to provide advice and useful contacts.