Retiring abroad must be carefully planned. The following tips and sources of information provide a general guide to help you.
Retiring To Turkey
Who among us can say we have never lain on a sun-kissed beach, or visited wonderful towns where the people are friendly and the way of life is much slower, and dreamt about living abroad? Making such a move would have been unheard of in previous generations but retiring abroad is an increasingly popular option these days and will continue to be so for future generations. Almost a million British ex-pats already draw their state pensions abroad and this expected to rise dramatically over the next 10 years.
For the purpose of this article we will assume that you have already done your homework about where you want to retire to and have chosen Turkey. It may sound unromantic, but retiring overseas is not just about those lovely sunny days and a lower cost of living. Thinking about the serious issues in advance could help you make the right choice and ensure your future happiness.
We have gathered together information and advice covering the key issues that you need to think about before you decide to leave and once you have arrived.
Before you go
Do your research. Speak to the British Consul in Fethiye, Marmaris or Bodrum, the foreign consulate in the UK and take a look at the information on our site.
Work out what your retirement income will be
You must be clear about your financial situation on your retirement. Remember to allow for exchange rate fluctuations and Turkish inflation (currently 10%) as this can erode your purchasing power. The following steps will help you do this.
Sort out your Savings
The old adage ‘Don’t put all your eggs in one basket’ should be your guiding light here. If you have savings don’t invest them all in the same type of investment, bank or geographical location e.g property in Turkey, savings in Turkey. Spread your risk to reduce any potential losses. For example, don’t put all your money into a Turkish Bank, put some into an English bank/building society too. That way if one suffers you won’t lose all your money. If in doubt get professional advice. Age Concern UK has a fact sheet that could be useful to you http://www.ageconcern.org.uk/AgeConcern/is4.asp
Request a UK State pension forecast
A Retirement Pension Forecast tells you in today’s money values the amount of state pension you have earned already and the amount you can expect to receive at state pension age. Complete form BR19 available from the Department of Works and Pensions website here http://www.thepensionservice.gov.uk/pdf/br19/br19intapr06.pdf. If you wish to obtain a pension forecast from abroad complete form CA3638 available from the HM Customs and Revenue website here http://www.hmrc.gov.uk/cnr/osc.htm. You will still receive your state pension on retirement (provided you have reached state pension age) if you live overseas, but check that it will be increased annually if you live in Turkey. Check if the money can be paid directly into your Turkish bank account otherwise you may have expensive transfer fees to pay. More information about pension planning can be found here
Find out about your tax liability abroad
If you retire abroad you may still have to pay UK tax on income you receive from the UK, over and above your age-related personal allowance. Turkey has a double taxation agreement (http://www.hmrc.gov.uk/manuals/dtmanual/dt19153.htm) with the UK so you may be able to pay less tax. See the leaflet Income Tax and pensioners (IR121) http://www.hmrc.gov.uk/pdfs/ir121.pdf for further information. However, you may be able to change your domiciled position to Turkey where pensions are not taxed. Again, seek professional advice.
Find out about the benefits of offshore banking
Once you are no longer resident in the UK, different taxation rules apply depending on your country of residence. You may want to seek independent tax advice and consider the benefits of offshore banking before you retire abroad. An offshore bank account can play an important role in helping to minimise your tax liabilities. Additional benefits may include asset protection, estate planning, confidentiality, security, and the ability to deal with English-speaking professionals who understand culture sensitivities and the unique needs of expatriates.
The benefits you receive in the UK may also be affected by your move abroad. Each benefit has different rules and some UK benefits cannot be exported e.g. housing benefit. For further information see leaflet Going Abroad and Social Security Benefits (GL29) http://www.hmrc.gov.uk/pdfs/nico/ni38.pdf
Your welfare rights outside of the EEA
The UK has reciprocal social security agreements with Turkey. The leaflets explaining what these agreements mean for you can be obtained from the Department for Work and Pensions (DWP). http://www.hmrc.gov.uk/pdfs/nico/ca78a.pdf
Let people know your change of address
Let your social security office, the Inland Revenue National Insurance Contributions Office – International Services, and the Department for Work and Pensions know when you are going to leave and give them your address abroad. Let them know if you later change your address. If you come back, let them know that too. Then if anything needs to be done about your contributions or benefit rights, it can be done straight away.
Find out about health costs abroad
Turkey is not part of the European Union yet so you will need to cover your own medical expenses. You are also strongly advised to get health insurance to cover private medical and dental treatment, and medical repatriation to the UK. However, its worth finding out how much treatments cost and considering self-insuring yourself for certain things. Dental treatment, for example, if relatively cheap.
BUPA International have comprehensive information on Turkey here http://bupa.wordtravels.com/Travelguide/Countries/Turkey/
Find out about accommodation costs
You must find somewhere to live. However, it may be better to rent to begin with, and to keep your home in the UK. If you intend to buy property abroad make sure you seek professional legal advice. Your local British Consul can provide a list of English-speaking lawyers who can assist you.
Importing Your Possessions
Turkey’s customs laws allow you to import your personal possessions but some items such as electrical items will be taxed. We have received many different accounts of the success or otherwise of people importing their possessions so be prepared for the worst to happen and insure yourself accordingly. The well known UK removal companies can arrange for removals to Turkey but it will not be a door to door service despite what they say because of the Customs regulations.
Redirect Your Post
If you haven’t been able to notify everyone of your new home in the sun then set up a post redirection through the Royal Mail. You can get the form and instructions on line at the www.royalmail.co.uk website. Redirection can last from 1 month, 3 months, 6 months up to one year and can be renewed again after that. The cost for a 1 year redirection to Turkey can be found on the website.
Ask for advice
Get in touch with expatriate organisations in the country you plan to live in. The Internet is a very good source of information (see Expatboards). Ask the foreign embassy in London for information on living abroad e.g. tax regime, healthcare provision etc. Read any relevant books and magazines you can find.
When you arrive
Register with the local authorities
The local Muhtar in the area you live in should be notified.
Arrange your visa requirements. The tourist visa only allows a 90 day stay. To stay longer you will need to either leave the country every 90 days or get a living permission.
Register with the British Consulate
This will help the Consul keep in touch with you if you get into difficulties, or in the case of an emergency in Turkey (Earthquake etc).
Ensure your Passport is valid
Fill in the next-of-kin details in the back page. If your passport is about to expire apply to the British Consulate to have it renewed. This is very important if you are applying for a living permission as the permit is limited to the time left on your passport.
Open a Turkish Bank Account
It’s really easy! All you need is your passport and the account can be opened up there and then. You don’t even need to put any money in the account. If you want a savings account you will need a tax number but most banks will sort this out for you. You can open accounts in Turkish Lira, Sterling, Euro and Dollar
Getting Money into Your Bank Account
Transferring Money from UK. You can bring out cash and deposit that in your bank account but you are limited to £5,000. An electronic transfer via the SWIFT system is generally used. Your Turkish bank will let you have the necessary codes. Most UK banks charge from £20 upwards for this service so it is more cost effective for large sums of money.
Take cash out using your debit card and pay it into your account. This is limited to your daily cash withdrawal limits and cash available in the cash machines but the consider commission charges your bank will make – typically 2.75%.
Learn the local language
Try to fit in with the local community. Hospital and local welfare services staff will not usually speak English. You will find day-to-day life much easier if you can make yourself understood. There are many websites that offer free help such as http://www.turkishclass.com/ and http://www.turkish-center.com/ as well as courses run by local language schools and individuals.
Make a will
If you die intestate abroad this can cause great difficulties for your heirs. Seek professional legal advice. You may require separate wills for assets and property held in the UK and other countries. Your local British Consul can provide a list of English-speaking lawyers who can assist you.
Check local traffic regulations
Driving is permitted on a valid UK for 1 year so obtain an International Driving Permit (IDP), which must be obtained before you leave the UK. You can find more information about the IDP and apply for one through the AA http://www.theaa.com/getaway/idp/. You will need to be fully insured and policies can be bought from many insurance brokers in Turkey. More details about driving in Turkey can be found on our website.
Find out about British associations, clubs, publications and charity organisations for the expatriate English-speaking community. Lists of these can be obtained from your local British Consul. Why not join Fethiye Times Gardening club? Events are held each month a provide a great chance to meet others. More details can be found on our website.
Stay in touch
Keep your family and friends in the UK fully informed of your address abroad at all times. The internet is a cheap and easy way to do this. You can use email or Skype to talk computer to computer for free.
Keep your vote
If you were registered to vote in the UK for the last 15 years then you can apply to vote in Parliamentary and European Elections. Complete the form from this link www.aboutmyvote.co.uk and post it back. A leaflet explaining the process can be found here http://www.fco.gov.uk/Files/kfile/Overseas%20Voters.pdf