Expat retirees warned over leaving cash in low interest accounts

Published:  2 Jul at 6 PM
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Expat retirees planning to use next April’s pension freedom rules should beware of leaving their cash in low-interest accounts.

A recent survey indicates that the majority of qualifying pension savers are likely to withdraw their capital from their pensions next April, and most are planning to leave the funds in their bank accounts or purchase an ISA. Experts are warning that changing bank accounts to take advantage of higher interest rates is the best way forward if a regular income is required.

Concern is growing that many retirees may not be able to cover their expenses from their capital for the reminder of their lives without placing their savings in growth-related products. However, the reputation of IFAs is at an all-time low, and the majority of expat pensioners may not have access to reputable advisors.

At the same time, the need for expats to become financially self-sufficient and build wealth without necessarily risking capital is a growing problem. Deferred pensions in the home country, for example, tend to decrease in value due to a lack of active management, and the art of successful self-management is rarely able to be learned in a rush.

Finding a trustworthy advisor may be tricky, dependent on your host country and its regulations, but it’s the best way to restructure your investment utilising newer generation products aimed at maximizing retirement income at a lower risk and with lower charges than the previous offerings. Remembering to stress your preferred risk appetite is essential, as is realising that low-risk investments always come with lower returns.
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