The expat retirement dream is not dead, but it could be more expensive and more complicated. Here’s what you need to do to make it work.
British citizens became third-country nationals on January 1st, 2021 and are not allowed to stay in any country of the EU’s Schengen-free Schengen area for more than 90 days within a period of 180 days.
You must apply for a visa for stays longer than 90 days, either for vacation or residence, said Jason Porter, director of specialist expat financial advisor Blevins Franks.
“If the British are planning to stay for 12 months or more, they usually need a residence permit. You can get this at the relevant consulate in Great Britain, ”he said.
In order to get a visa or a permit to stay in an EU country, the British have to show that they are financially independent.
Local authorities will want to make sure you have enough income to get you through retirement rather than resorting to the state.
Britons have to jump through more hoops to prove that they and their loved ones have an adequate income and are not a financial burden.
Each country has different rules for property, income, financial resources, and health insurance.
In France, for example, expats must prove that they can at least meet the local minimum wage, Porter said.
For 2021 that is 18,655 euros, but after deducting social security contributions, this will drop to 14,667 euros. The French authorities will use the lower amount, which at current exchange rates is around £ 12,550 per year.
Porter said this is above today’s new state basic pension of £ 9,339 a year, requiring expats to demonstrate they can earn income from investments and retirement plans. “A couple with two state pensions should be fine,” he said.
Portugal also requires the British to have sufficient income to meet its national minimum wage, which is currently € 7,980 (£ 6,838 per year) for an individual and € 11,970 (£ 10,250) for a couple.
READ MORE: The State Pension Amount Changing For Expats In 2022 You Are Affected
However, the rules are stricter in retirement hotspot Spain, where singles need £ 23,578 per year and couples £ 29,473. “You need to show that you have a general asset, such as cash in the bank or other savings and investments that can be easily liquidated,” Porter said.
UK citizens moving to the EU will no longer have access to free NHS healthcare when visiting, except in emergencies.
This is true even if they are state pensioners and have paid social security contributions for decades, as access to the NHS is based on residence.
For visits to the UK, you may need to get travel insurance that includes health coverage, Porter added.
Once you have registered to live and work in an EU country, you can no longer rely on the European Health Insurance Card (EHIC) or its successor, the Global Health Insurance Card (GHIC), for local health care.
Expats on a UK state pension can apply for state health care in their chosen country using the S1 Form, Porter said. “This is provided by the EU state they live in, but paid for by the NHS.”
You can obtain the S1 form from Overseas Healthcare Services. Call 0191 218 1999 or email [email protected]
British residents living abroad do not have to pay their taxes in the UK, but locally, and lose tax benefits that they take for granted.
Money held in Isas will no longer be tax-free abroad, nor will the 25 percent tax-free pension allowance.
Local capital gains tax and inheritance tax rules are also different and in some cases may be more criminal than the UK.
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