Are soaring UK property prices the last hope for early expat retirement?

Published:  20 Nov at 6 PM
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UK house price increases are proving lifelines for Brits hoping to retire overseas.

For the hundreds of thousands of Brits who haven’t saved enough cash to fund a retirement far from Brexit Britain, soaring UK house prices may well be a lifeline. A recent survey by a leading insurance company has revealed just nine per cent of Brits over the age of 50 have amassed enough savings to see them through their retirement years, even if they choose a less expensive country in which to settle.

According to the survey, the average British pension fund held by those in their 50s is £146,666, with the amount of future savings needed in order to comfortably retire at 55 standing at £531 monthly. As a result and given the UK’s still-rising cost of living, those in mid-level jobs and with families to support could find themselves unable to retire until much later in their lives. As an alternative, Britain’s soaring property prices can provide an escape hatch for those desperate to move overseas to a cheaper country.

The average equity held in bricks and mortar is around €133,000, a useful amount available via equity release without resorting to a quick sale. However, as one in five of those who took part in the study have zero pension savings, selling up and moving on is likely to become the popular option. Apparently, a modest but comfortable retirement is considered to cost around £20,000 annually, with the British state pension providing just £8,767 a year. Topping up the predicted annual spend would require a pension pot of around £282,000 – impossible for the average Brit who’s dreaming of an early retirement.

Basically, even for those planning on working until they hit 65, generating savings at this level veers between the difficult and the impossible. Figures like those outlined above assume a salary not available to the bulk of the UK population, with single women in an even worse situation due to wage inequality. Whilst equity release is one answer to those with moderate pension savings, for those looking to the UK state pension for their financial survival selling the family home after its younger members have flown the nest and emigrating to a far cheaper location is getting to be the only remaining option, Brexit notwithstanding.
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