There are many aspects to consider when you come to look for your ideal retirement home abroad. Even if you’ve had your eye on a particular region or country, it is important to bear in mind certain things to ensure you can have complete peace of mind when investing in your property.
One crucial aspect of moving abroad is to consider how your pension will be affected.
Traditionally when you reach the age of retirement, you are eligible to claim your State Pension. If you plan on expediting, you may already have an idea of which country your money will be going to and which account it is going to be paid into. Two key things to consider are:
- Your pension will only increase if you are living in
– The European Economic Area (EEA)
– A country which has a social security agreement with the UK
- You might be liable for tax in the country you retire to.
Websites such as GOV.uk can help with further explanation.
Your new mortgage will require considerable research and you may also need good legal advice.
It is recommended to compare a range of lending companies and offers to attain the best deal. If you not certain of the terms and conditions, ask your lender to clarify these for you. In some cases the seller’s agent might suggest a mortgage, however it may not be the right deal for you.
Key things to bear in mind:
- Interest rates – The lower the rate, the less interest you pay
- Set up fees – These can catch you out, so always enquire about set up fees
- Repayment methods – Choose the ideal method for you
- Early repayment options – Ideal, as they can help reduce the interest you pay
- Cancellation fees – Another thing that could catch you out should you decide to cancel
Remember to be sure of all the nuances of your chosen mortgage before signing and keep in mind the currency exchange rates.
- Additional Costs
As well as buying your retirement home and the cost of moving, there are additional purchases that spring up here and there. These all need to be accounted for in your budget.
Peripheral costs can include:
- Translators – Costly, but sometimes a requirement if your seller does not speak English
- Financial advisers – Also costly, but has the potential to save money in the long run
- Lawyers – preferably a local lawyer that specialises in property law
- Bank transfers – Banks usually charge a higher exchange rate than foreign exchange brokers
- Surveyors – Usually required to perform a survey of your property
- Utilities – paying for gas, electricity & plumbing to be connected (if they aren’t already)
This is more a cultural cost than a financial one. There are programmes available such as Duolingo provide simple activities to help you learn a language.
If you are able to speak the local language of your chosen country, then it can have many benefits; including establishing rapport with your neighbours or local shop owners and communicating to the seller or agent when you are purchasing your property.
Not only will you be able to understand the seller, agent and the local lawyers, but it can make transactions and discussions more amicable. It’s easier to establish a good relationship directly rather than via a translator – and it saves money.
- Location and Accessibility
Depending on where your property is located will affect the people you come into contact with, for example, more rural areas will allow you to dive into the local language and culture, whereas other areas are known for housing a mixture of nationalities.
It is recommended that you visit your chosen country a few times to get an initial taste for the culture, both in and out of peak season, and to experience the destination at different times of the year.
It is advised to consider accessibility when choosing a property. If you are in a more remote area, a car may be a necessity – and will undoubtedly need maintaining.
Key things to consider:
- How far away you are from a local town?
- Can you get to a GP surgery, dentist, hospital and local shops with relative ease?
- Can you still get to these places in a variety of weather conditions?
As well as having access to your local community when you need it, you may decide to not stay in your property forever. Whether you move on or decide to rent it out when you are out of the country for a particular period, all of the above are aspects that will help to attract buyers and/or renters.
Keeping in mind these practical tips will help you not only find your ideal retirement property, but can also reassure you that you know you are getting what you’re paying for. At the end of the day, retirement should be your ideal destination, so bear in mind these important pieces of advice to help you achieve your perfect retirement.
Written by Alex at Currency UK