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Does the UK Government want the Elderly to Emigrate ?

By David Goodall - Mon 26th Mar 2012

.... 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 :


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.

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. 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

Please feel free to contact me for further information by either commenting in the area (below), or clicking on the link through to my own website (above).

Comment on this Blog

It's impossible to deal with individual cases via a blog. I can assure your readers that Paragraph 2 is correct and hinges on the treatment of income' The paragraph relates to income from QROPS, as per the heading
David Goodall - Tue, 27th Mar 2012
I refer to the third paragraph no 2 Taxation policy I dont tink this is the case , I am a tax resident in spain and pay more tax here than I did in the UK nearly double which I am not happy about all the relief I get is the basic of 6000 . something euro plus 2000 something age allowance where in the uk it is or was £9000.00 - a big difference !
Peter Cowd - Mon, 26th Mar 2012

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