European Court could slash pension annuity rates for Brits living in Tenerife

February 15, 2011 – 11:40 am

Pension funds can be boosted by purchasing prime property in Tenerife

It is possible that on the 1st March, the European Court could rule that current use of gender to calculate insurance premiums, including pension annuities, are in breach of sex discrimination laws. If unisex rates come into force, men, whose current annuity rates are said to be up to 10 per cent higher than those offered to women due to lower life expectancy, could see their annuity rates slashed.

Nick Carlile, Founding Partner of Platinum Portfolio Builder, urges everyone, not just those approaching retirement, to consider alternative investments to provide for their retirement. Nick comments “on top of reports that annuity rates fell 3% in 2010, once again, the dreams of many for a comfortable retirement could take a further battering, as they realise their annuity rates could be cut between a further five and ten percent.

Such a change is likely to create further resentment by investors who are passing their capital to an insurance company, rather than to their heirs.” From 6th April the compulsion to buy an annuity is to be scrapped. Nick Carlile advises those capable of meeting the government’s minimum requirements and demonstrating that their fund, plus their state pension will generate an income of around £20,000 a year, to look towards investment freedom and consider alternative options for their pension pot.

“A combination of steadily rising rentals, a fundamental shortage of housing and the UK pension situation looking increasingly frightening to people approaching retirement, is presenting appealing opportunities for passive buy-to-let investors. With improved loan performance in the buy-to-let market, which grew 7% in 2010, experts have suggested that the buy-to-let market is on the front foot again and entering a period of growth.

“If handled correctly, the benefits are twofold, providing regular rental income along with increasing capital gains. Crucially, the rental income will rise over time in line with wages and prices, so in real terms you’ll be protected against inflation as you get older. Plus, unlike many annuity schemes, the assets remain untouched ready for when you decide to sell or the property will go into your estate on death which could be passed to heirs.”

This decision may change the views of those thinking of retiring in the sun in Tenerife and the Canary islands  and it is clearly worth checking what your future retirement fund may be, particularly if you are looking to buy or rent prime property in Tenerife.

Source: Platinum Portfolio Builder

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , , , , , , , , , , | Comments (0)

Spain is Brits’ favourite

September 5, 2010 – 11:11 am
Spain and Canary Islands Brits favourite spots

Spain and Canary Islands. Brits favourite spots

If you are looking to up sticks and spend your golden years somewhere warmer, check out Standard Life’s new list of the world’s top five retirement hotspots – but before you jump on that plane, be warned that a life abroad may leave you less well off than staying in Blighty thanks to pension woes.

Spain is the country that most Brits would like to retire to, due to it’s warm climate, outdoors lifestyle and the proximity and ease of getting back to the UK.  There is a crucial point to consider before heading off for sunnier climes – namely money and whether you will actually be able to afford the retirement you are dreaming of.

Andrew Tully, Senior Pensions Policy Manager, Standard Life said, “Retiring abroad is a dream for many people but without careful planning and advice, things can potentially go wrong very quickly.”

If you move abroad permanently, any increases in your UK state pension will only apply if you are living in an EU country (including Gibraltar and Switzerland), or a country with a reciprocal social security agreement with the UK. So, while your friends back home in ol’ Blighty may be enjoying double the level of state pension that you are getting after 20 years.

If you choose to move outside these countries, the amount of UK state pension you will receive each year is frozen at the amount initially paid when first claimed – or if you emigrated more than one year after payment began, at the rate in force when emigrating). Popular retirement countries outside these reciprocal agreements include Australia, Canada, New Zealand and South Africa.

Mr Tully added, “One significant consideration before you move is to think about your state pension and what, if any, reciprocal agreement is in place.  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.”

If you are considering retiring abroad in the future, but are wondering if your retirement savings will be sufficient, Standard Life has launched www.getarealitycheck.co.uk, where you can check if your plans are on track.

Top tips for retiring abroad

Seek independent financial advice before making plans about future pension provision or transferring your pension overseas.

Check what reciprocal basic state pension agreements are in place with the destination country, if any (check with the Department for Work and Pensions).

Inform your social security office, HM Revenue and Customs, and the Department for Work and Pensions when you move and provide your contact details abroad.

You can get a forecast of your state pension by completing a BR19 form or go to www.thepensionservice.gov.uk.

If already overseas, complete form CA3638 or call The International Pensions Centre on 0191 218 7777.

Check your state pension age (SPA). For women, the SPA is rising from 60-65 between 2010 and 2020, with further rises to 68 currently expected to take place by 2048, although the coalition government may accelerate these changes.

Find out about welfare rights abroad.  Some UK benefits are not payable outside the UK, others apply only in the EU or in countries which have agreements with the UK.

Tell your bank, building society and any other financial institution that you have a policy or agreement with them and are moving abroad.

Contact your local council to let them know when you are leaving and leave a forwarding address.

Find out more about healthcare costs in the country you want to move to.

Inform your GP and dentist you are moving, and consider private healthcare.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do | Tagged , , , , , , , , | Comments (0)

Four in ten retiring Brits considering moving abroad

May 15, 2010 – 5:42 pm
Retiring Brits consider heading for Tenerife and Spain

Retiring Brits consider heading for Tenerife and Spain

New research from the Foreign Office divulges that more than four in ten Brits nearing retirement age are considering doing it abroad, and once again crime and weather are to blame for the record number of over 55s wanting to leave the UK. Each year around 200,000 Brits leave for foreign shores. Official Foreign Office figures reveal that a third choose Australia or New Zealand whilst more than a quarter went to Spain or France. Weather is the main driver, particularly this year after a snow-strained winter, one of the worst in decades.

Chris Mercer,  comments, “At a time when many fear Britain is losing its national identity, the irony is that pockets of Spain display the real essence of Britishness”. Where Britain has gradually lost its community spirit, destinations  in places such as Tenerife has it in spades.  There’s also the added value of being able to receive a UK pension in a Spanish bank account.

By Angela | Posted in Economy, General, Health, Holiday, Inspirational, Miscellaneous Articles, Property, Tenerife, Things to Do, Uncategorized, Weather | Tagged , , , , , | Comments (0)