Monday, 26 March 2012

Does the UK Government want the Elderly to Emigrate?

There are signs that they do

I realise that it sounds unlikely but there are reasons behind my view. Spain has many lifestyle advantages and those retired or near retirement might be encouraged to go for the following reasons;

·        QROPS

After the recent review it was thought that the Government was discouraging transfers of pensions out of the UK. In reality, the changes announced in the Budget are a warning shot to those who would seek to ‘misuse’ UK pension funds.

In particular, the ability to encash funds and take 100% for immediate use has been scrapped. This was a ‘loophole’ now closed.

But there is nothing in the Review which discourages retiring abroad and taking your income there. Please email me for more personal information

·        Taxation policy

I was somewhat shocked by George Osborne’s statement that there would be a review of age-related tax allowances. In reality the budget technical notes (the devil is in the detail) makes the following two changes which negatively affect the over-65’s

1.      Those already in receipt of the Over 65 Age Allowance will see this ‘frozen’ for the next 3 years. In the past this allowance has been index-linked to counter the effects of inflation

2.      From 6th April 2013, for people reaching the age of 65, the age allowance is scrapped! This means that anyone born after 5th April 1948, will NOT receive the Age Allowance

Taking away age-related tax allowances might just be the ‘final straw’ for some people!

Readers should also be aware that this policy contrasts greatly with Spanish taxation policy. It’s too complex to explain here but individuals and couples can get professional advice by sending me an email and I can put you in touch with the right person. However, the Spanish system assumes that part of the retirement income is ‘capital’ which is untaxed and the minority is ‘interest’ which is taxed. This means the effective tax rate in Spain is MUCH LOWER than the UK.

  • National Health Service (NHS)

The cost of treating elderly people is MUCH higher than that of younger citizens. That has been clear for many years but as the population lives longer, the cost will grow substantially.

The current controversial reforms are aimed at substantially reducing future costs. Getting more elderly people to emigrate will help too!

The standard and quality of healthcare in Spain is superb.

It is very important that anyone contemplating moving to Spain should seek professional advice. I can give this guarantee that any professional that I refer you to WILL NOT charge an upfront fee.

Professional advice will have a cost but no advice could cost you everything

You might like also to read these posts from my Blog;

Getting professional advice

Review of the UK Budget 2012

Rent before you Buy

Please enjoy

David Goodall
Financial Pages in Spain