Moving Abroad From The UK: 5 Key Challenges & Financial Tips

Updated 22nd May 2025

Many people consider retiring and moving abroad as they believe they can achieve a better quality of life than they would in the UK.

However, there are some distinct challenges associated with moving overseas, including various tax implications, some of which have been affected by the Budget announcements on 30th October 2024 and 26th March 2025.

Key things to consider before moving to abroad from the UK

If you’re thinking about moving abroad, you might need to consider these six unique challenges.

1. Lifestyle differences: Is the grass really greener?

Many people that talk about moving abroad only consider the financial aspects of the decision. However, it’s important to think about the quality of life and activities that you enjoy at home, and how that would compare with other countries.

In 2023, researchers from the London School of Economics (LSE) conducted interviews with some of the UK’s wealthiest individuals. The research found that there were many reasons for continuing to live in the UK, rather than moving abroad. A common motivation for staying was the cultural and social activities that they enjoy in the UK.

If you move to a different country, the culture or local amenities might not align with the kind of lifestyle you want. You’re also likely to be leaving your friends and family behind.

While this is not true of all countries in the world, moving somewhere simply because it has lower taxes or higher average salaries could mean that you make sacrifices in other areas of your life.

2. You may not receive vital healthcare you need in later life

As you get older and your healthcare needs change, you may require additional medical support from family or professionals. In some cases, you may need to move into a residential facility.

If you’re living in the UK, you have access to NHS services free of charge. The local authority will also contribute to your social care costs if your total assets – including your home – fall below £23,250.

However, if you move abroad, the cost of care could vary a lot. Certain countries may have a subsidised health service that still requires you to make some payments, while others have completely privatised systems.

Government support also differs from country to country. In addition, not all countries have the same health care infrastructure, and certain treatments and medications may be more difficult to get access to.

As a result, both the cost of your medical and social care, and the quality of the care you receive, could be very different to what you’d expect to have in the UK.

3. Financial costs you might not have accounted for

You may want to retire abroad somewhere that has a lower cost of living, so you can achieve a better quality of life in retirement.

However, even if your general expenses are lower, there could be additional costs you haven’t considered, such as:

Medical care
Visa fees
Travel costs for visiting family and friends in the UK
Fees for transferring your savings abroad.

As a result, you may not save as much as you thought you would by moving abroad. In some cases, the cost of living could be higher once you factor in these expenses.

That’s why it’s important to do your research before deciding whether moving is the right choice for you.

4. Moving your pensions abroad could be complex

If you plan to retire abroad, you’ll need to decide what to do with your pension savings, as these will likely form the bedrock of your retirement income.

You have two main options for managing your defined contribution (DC) pension when moving abroad:

Leave your savings in the UK scheme and draw from them while abroad.
Move your savings to a pension scheme in your new country of residence.

Leaving your savings in the current scheme may appear to be the easiest option but many providers won’t pay your income into a bank account overseas, and those that do may charge a fee. If you pay the funds into a UK bank account and then transfer them abroad, you may also pay transaction fees. This means you could lose a significant portion of your savings.

The alternative is to move your savings to an overseas pension scheme. Normally, you’ll need to move to a qualifying recognised overseas pension scheme (QROPS) if you want to avoid large fees. It’s important to note that these arrangements differ from UK regulated pension schemes, so taking financial advice would be advisable.

Additionally, if your savings exceed the Overseas Transfer Allowance (OTA), £1,073,100 in 2024/25, you may face a tax charge when moving your pension.

Retiring abroad could affect your State Pension payments too. While you should still receive your State Pension, you may not benefit from any triple lock increases, which is the system that sets the annual increase in State Pension payments. Essentially, your payments could freeze at their current level when you move to certain countries. These countries include Australia, Canada and South Africa, among others.

Money Week reports that the average State Pension for somebody living in the UK is currently £10,099 a year. In comparison, this falls to £2,946 for those who retired abroad in a country excluded from the triple lock increases.

5. Estate planning and Inheritance Tax complications for you and your family

Creating an estate plan is crucial as it allows you to pass wealth to your loved ones and potentially reduce the Inheritance Tax (IHT) they pay. However, estate planning could become very complicated if you move abroad.

This is because you might have properties, savings accounts, investments, and pensions spread across both countries. Depending on your situation, Inheritance Tax could be due on any UK assets, and there may also be tax charges in your country of residence. Put simply, your loved ones may still owe Inheritance Tax although you don’t live in the UK anymore.

HMRC typically treats you as being based abroad when you have lived in another country for 10 or more years in the last 20. If you fall into this group, Inheritance Tax is usually only due on any assets still held in the UK. However, assets held in your country of residence may be subject to local inheritance laws.

Due to changes announced in the 2024 Autumn Budget, mitigating a large Inheritance Tax bill could be more difficult. Our simple IHT calculator can help you work out how much tax may be owed.

Without an estate plan in place, it could be very challenging for your loved ones to find all your assets, then navigate multiple tax systems to work out what they owe and to whom. Taking the right steps to align your long-term financial goals with your current situation can be tricky, so seeking independent financial advice is highly recommended.

6. Further Tax implications of retiring abroad

If you’re planning on moving to another country during your retirement, there are other taxes to consider alongside the potential Inheritance Tax implications.

Capital Gains Tax is tax paid on any chargeable assets, and sometimes on cryptoassets, such as cryptocurrency, at the point of selling. Chargeable assets could include personal possessions worth over £6,000, second homes, and business assets.

In you live outside the UK, Capital Gains Tax is typically only due on property or land held in the UK. However, if you’re temporarily a non-resident, Capital Gains Tax may be due if you return to the UK within five years of leaving. As this can get complex, it is always worth speaking to an independent financial advisor if you have concerns about your specific situation.

So, what’s the solution?

Whether you decide that the culture and lifestyle of your chosen country perfectly matches your personality, or that staying in the UK is better for your bank account, it’s important to carefully consider the financial implications of your decision.

Moving abroad might not be the most sensible course of action if you are simply trying to reduce the taxes you pay or live somewhere with a lower cost of living. In short, we can help you achieve your financial goals without the need to emigrate!

For example, if you’re concerned about the tax that may be owed in the future, we can explore ways to mitigate a large bill. If you’re worried that you don’t have enough retirement savings, we can discuss how to maximise the size of your pension pot.

Ultimately, with our support, you can reach your retirement goals, whilst planning for the long term, and thinking about your loved ones.

Get in touch

If you’d like to discuss whether we can help you achieve your financial goals, contact us!

Email hello@fcadvice.co.uk or call 0333 241 9900.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate estate planning or tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term (minimum of 5 years) and should fit in with your overall risk profile and financial circumstances.