JANE SLADE reports on 10 major things you need to consider when retiring overseas
According to research the number of people approaching retirement wanting to live overseas is higher than before the economic downturn, with Spain being the most popular destination followed by France, Italy, Portugal and Greece.
A warmer climate, healthier lifestyle and low cost of living are all elements contributing to the grey flight not to mention the lure of cheap property. Even so cash-laden baby boomers need to beware that buying a property overseas to live in permanently is very different from hunting for a holiday home to use a few weeks a year.
Choose a place that has something going on year round; seaside resorts are great in summer but can be ghost towns in winter. Big coastal towns like Alicante and Valencia can be better choices than small villages.
Buying on the fringe of a town or city has lots of advantages not least good transport links with the rest of the country and access to restaurants, shopping and entertainment. It’s no surprise to find Tuscany so popular in Italy with Florence, Arezzo, Pisa and Siena so easily accessible.
A remote farmhouse may be impractical and lonely if you don’t speak the language and find yourself on your own.
Jelena Cvjetkovic, international network manager, Savills advises: “When considering a retirement property, location is key. The rural dream may sound appealing but the reality of seasonal flights or relying on only one budget airline could be an issue when family want to visit or you need to rush home to see the newly born grandchild.
“We find that the majority of our purchasers want to be on the outskirts of a village, close enough to get a pint of milk, but far enough for some peace and quiet.”
Living within two hours of a major airport which has year-round flights is ideal as it means you may get more visits from family and friends. If you are not sure where you want to live, take your time and rent before you buy. By renting for six months you can see what the place is like at different times of year.
Europarcs (www.europarcs.com) has just launched long-stay holidays at two of its resorts; Villanova near Barcelona and Marjal Costa Blanca near Alicante where retirees can stay up to six months and research the area where they would like to live.
Some countries can be blisteringly hot in summer which may not suit everyone. Seeking a dry, moderate climate is best as it enables you to keep active year round pursuing your favourite outdoor activities such as golf, cycling, hiking.
A moderate climate also keeps the heating bills down. The Algarve is a retirement-friendly region of Portugal which boasts an ideal year-round climate. A spokesman for the new Portugal property portal Meravista (www.meravista.com) reports that the cost of properties in the Algarve are far lower than in the UK with good road networks and proximity to beaches, shops and restaurants.
“Most people retire to the Algarve for the climate (300+ sunshine days a year) and the lifestyle. Speaking the language is a bonus, but it isn’t vital as English is spoken in most places.”
3. Plan ahead
Think before you sell your home in the UK. Are you sure you won’t want to move back if one of you dies or you get too old to manage? Will the friends you make abroad return home in their old age and leave you lonely? If you can buy a small bolthole somewhere in the UK which you can rent out while you are overseas this will not only provide a nice passive income stream but somewhere to live if you decide to return home.
You will enjoy your life abroad so much more if you can speak the language. The locals will be better disposed towards you, you will make more friends and be able to access and participate in the local culture and festivities. But more important you will be able to negotiate with local tradesman and not fall prey to cowboys.
If you don’t think you can manage learning a foreign language then choose to live in a country where English is more widely spoken such as on the Spanish coast, Portugal, Cyprus, Canada, Australia and America.
Check whether you need to take our private insurance or whether there is a reciprocal arrangement with our NHS in your chosen country i.e. SIP cards in Spain for non-working foreign residents. Find out how to access local medical services and particularly the local GPs. Do they speak English? What is the local hospital like? Does it have a stroke unit?
In Spain the culture is for the family to take care of patients in hospital, would you have someone to take care of you? Would you be all right being in poor health in a foreign country?
6. Security and manageability
Buying something that’s easy-to maintain is ideal as is a property on a scheme with on-site staff who will do most of the work for you. Don’t stint on quality locks and gates particularly if you plan on leaving your home for a long period and avoid taking on a renovation project unless you have previous experience and can speak ‘construction’ in the local language.
You want to be less than two hours from the nearest airport, walking distance from the local market/village shop, doctor, dentist and not far from a good hospital! Make sure your property has a lift if you are on an upper floor and no marble stairs which can be perilous.
Steep gardens and endless steps may be all right now but in 10 years time you may not be quite so fit. Julian Walker from www.spotblue.com estate agents in Turkey cautions. “You need to consider the terrain.” Indeed some coastal resorts in Turkey are very steep like Kalkan, which has a road so vertiginous they call it cardiac hill! Bodrum is less undulating and Fethiye is ideal for year-round living on the level.
An on-site concierge can be helpful to if you need a lift into town, book a local taxi or help you wish shopping, packages.
Driving may be an issue in the future too. You may not want to take long car journeys particularly if you are alone, so check there is a local train station with good links.
8. Low living costs
As with most countries you will find some items are less expensive than others and can fluctuate. Prices have been rising in Europe and petrol is about the same price as the UK. Alcohol and petrol are even costlier in Turkey and food in supermarkets more pricey than in local markets.
Julian from Spot Blue adds, “Make sure you shop at local markets where food is very much cheaper and turn the air con off whenever you can.” With the government threatening to withdraw winter fuel allowance from retirees living abroad you need to make sure your home is well insulated. Even Spain gets chilly in winter.
The less touristy the town is the more likely there is to be a year-round community. Talk to people in the village you want to live in, and hope for a good mix of nationalities so you won’t feel the only foreigner. “A sense of community is important,” adds Jelena Cvjetkovic of Savills. “Visit the area at different times of the year to make sure that the restaurants and shops are open year round.”
10. Pensions and benefits
Don’t forget to make a will in the country you are moving to. Some countries such as France and Turkey have very different rules when it comes to inheritance, which can get complicated if you have step children. Civil partners may not be afforded equal rights either.
Also upon the death of a spouse all bank accounts may be frozen so having individual accounts as well as joint is advisable. Taking out residency in the country you move to may have benefits too. The UK has reciprocal tax arrangements with most overseas countries so you should only pay once. To find out how to transfer your pension and claim other benefits visit www.gov.uk/moving-or-retiring-abroad
“Do your homework with regard to pensions, benefits and medical care under the state healthcare system. Make sure you will continue to be eligible and receive these allowances once you move abroad,” advises Rhona Hutchinson of Integrated Relocation Spain (www.i-r-spain.com). And watch out for currency fluctuations which can impact hugely on the amount you receive.
Trudie and Peter Oakley moved to Southern Spain from Bexhill in Sussex 10 years ago. They rented for six months before buying a villa on a golf resort near Torrevieja which they rent out and another home in the Hondon Valley near Alicante where they live full time.
“We just love it here,” says retired property manager Trudie, 66, “We enjoy a lovely life, have made lots of friends and been able to enjoy a fresh start.
“Hondon is in the mountains so cooler than on the coast. It’s a very sociable village with lots of different nationalities. We are enjoying a slower pace of life; but been able to do things we never had time for before. I’ve written a book, Peter’s done lots of work on our house landscaping the garden, building a car port. He is much healthier than he was in the UK too and we keep fit walking our four dogs.”
Hondon is a rural community of farmers growing olive trees, vines and almonds. “We have seen real changes though,” adds Trudie. “Some families are suffering real poverty and our local association raises money for them. It’s not a touristy area so you don’t get ghost-town feel in winter, there’s a really nice community feel.”
The couple who were divorced when they met each sold their three-bed townhouses in Bexhill for round £120,000 each. From the proceeds they bought a villa for E260,000 on the five-star La Finca golf resort near Algorfa (www.lafincagolfresort.com). The property has two bedrooms on the ground floor and the couple plan to move there in their dotage.
In Hondon everything is within walking distance of their large three-bedroom, two-bathroom villa with garden and swimming pool. “Our home is gated and alarmed and our four dogs are good security,” adds Trudie.
“The health service here is fantastic – I had an eye operation last August; no waiting, no problems. We are resident so quality for a SIP medical card and free treatment. Taxes have risen but we are better off under the Spanish tax system.
“Our properties are worth less than we paid for them but we are not moving. We have more quality time with children and grandchildren when they visit and also have somewhere we can move to when we can’t manage the stairs.”
Useful Tips from Trudie and Peter Oakley
1. It may be worth taking out a small mortgage on a property overseas even if you don’t need one, because banks won’t lend on a property that is not totally legal. This is particularly applicable in Spain where you can’t always trust local notaries and lawyers.
2. Check that there is a good, reliable fast Internet and mobile phone reception where you want to buy. Most retirees couldn’t live without Skype, email and satellite TV.
3. If you plan to take furniture consider the cost of transport and import taxes. Take choice pieces and antiques but resist large bulky items which may be too big and costly to move and not fit the design of your home.
4. Be cautious when buying a second hand car overseas; if you buy from an individual and there is a debt on the car you may be liable. Better to buy from a garage and ask them to check with the vehicle licensing authority that there are no outstanding fines owed.
5. Security. If you are living alone or plan to leave your property unoccupied fix secure locks, an alarm and a gate if you can. In Spain many owners keep dogs.
6. If you want to employ a local tradesman, ask neighbours if they can recommend someone rather than respond to an advert in the paper.
This article was first published by www.aplaceinthesun.com