While UK residents tend to have a straightforward pension plan going with the state and workplace pension, ex-pats don’t have it quite as easy. Ex-pats may have a state pension ready from their years contributing to the National Investment while at the same time contributing to the state pension fund of the country where they are currently based. What you may not know is that this leads to you receiving a lower pension than you expect to receive and being challenged by volatile exchange rates and bank delays.
If you want to know how you can secure a more stable pension, here are a few tips we have for you.
1. Determine how much you’ll need
When you plan for your retirement, one of the first things you should ask is, how much do you need to live a comfortable life? Try to be generous with the figures to account for inflation by the time you’re 50. If, for example, you estimate that you’ll be needing £30,000 a year to get by, inclusive of other costs like hospitalizations or medication, then you’ll know that relying on the state pension won’t be enough. The maximum pay-out only gets you less than £8,640 a year, so you need to look into other options to boost your pension plan.
2. Save money
One of the most obvious ways you can guarantee money in your retirement is by saving a portion of your income while you’re still young. Even just a 20% annual savings is a great habit.
Another way you can add to your pension funds is by extending your work life. The longer you work, the more money you can have set aside. There are occupations available to people even when they’re above 50. These are jobs that don’t entail strenuous activities while still paying a good salary, such as research, academe, and executive corporate positions.
3. Diversify your investments
Relying solely on property investments or stocks could land you in trouble when the economy crashes. This is why you should diversify your assets so you can have multiple backup plans in place. This can be hard to do when you have no experience with finance or investing. Working with experts from TailorMade Pensions can help you understand various investment options and decide on ones that are suitable for your income and goals.
4. Consolidate your pensions
If you’ve worked under different employers and countries your whole life, you may have different pension pots at your disposal. By consolidating your pensions, you can manage your savings easily and you can save money from moving from a high-cost scheme to a low-cost one. For ex-pats, a popular option is to consolidate your pension into a QROPS. This offers many benefits, including being able to access your funds at 55, a whole decade earlier than the UK state pension.
You should have a solid retirement plan ready so you don’t burden your loved ones with taking care of you when you’re old. Expand your financial literacy and work with experts so you don’t have to spend the last years of your life worrying about money.