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All abroad

Retiring overseas is the thing to do, faced with falling standards of living in the motherland. More of us are doing it than ever before, hoping of spending one's autumn years in a more temperate climate where the cost of living is that little bit more manageable.

Recent legal changes have made it easier for expat retirees, who can now take their pensions with them. Standard Life claims that Spain is the most popular destination – though statistics show that it is also the country where Brits abroad are most likely to get into trouble.

John Lawson, Head of Pensions Policy, Standard Life has these pearls for potential ex-pat pensioners: 'Retiring abroad is a dream for many people, but does require careful planning and advice. Many people think living abroad is cheaper than living in the UK, but this isn’t always the case.

'Doing your homework in advance of moving, matching your retirement income and expenditure, and making the appropriate decisions around purchasing an annuity or using income drawdown are key considerations. Your retirement income could also be subject to exchange rates and currency fluctuations, as well as local tax laws.

'You also need to think about your state pension and what, if any, reciprocal agreement is in place. A reciprocal agreement entitles you to any increases in the UK state pension, paid for by the country you retire to. However, if there isn’t a reciprocal agreement in place, then you need to be very careful your retirement income is sufficient to cover your living costs over a long period of time. Over a 20 year retirement, your basic state UK pension could halve in real terms if a reciprocal arrangement is not in place.'

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