Expat Savings Advice – Leveraging Your Assets as a Retirement Strategy

When it comes to savings, many people are naturally reluctant to move their money or do anything that could impact the total value – even if the associated risk is small.

Savings accumulated over many years could be intended as a contingency fund, a retirement budget, or a financial cushion to support bigger purchases.

The issue is that expat savings advice will rarely centre on leaving savings in situ since there is the potential that, with relatively low earnings and the risks of real-world inflation eroding the value, your wealth could slowly begin to depreciate before the time comes to dip in.

Here, we’ll share some of the various savings strategies to help you compare and contrast your options to ensure you’re making the most of your assets.

Moving Savings Safely – Advice for International Transfers

The first thing to look at is how you move your cash, which requires planning as much as shipping your belongings or finding a new property abroad.

It’s useful to think about:

• Currency exchange rates – Booking an FX rate in advance could save a substantial amount if you suspect the exchange rate is likely to change. Professional guidance is recommended if you’re transferring large amounts into another currency.
• Access to your wealth – Even if you have a separate savings product, you may need to tap into those resources after relocating. It can be trickier if your accounts are held in a UK branch and you do not have a presence in your home country.
• Payment costs – If you wish to provide for continuing obligations back in Britain (such as utility costs on a property), it can get expensive to pay from an international account. Maintaining an active account in the UK might be more cost-effective.
• Deposit protection – The FSCS consumer insurance scheme protects savings up to £85,000 per person per financial institution in Britain. The assurances overseas differ, and it’s wise to check if any bank you intend to open an account with is suitably registered with an equivalent scheme.

Finally, before we talk about what you do with your savings, it’s important to mention taxes. There isn’t a UK wealth tax, so you don’t need to declare or report your cash savings aside from interest earned – but that often isn’t the case abroad.

You might be obliged to pay a wealth tax and declare your liquid assets, so having an experienced wealth manager familiar with the regulations in your new home country will help you avoid falling foul of non-declarations.

Maintaining a Retirement Savings Account

Next, we’ll compare some of the options. You can certainly leave your savings where they are, usually accumulating small amounts in interest over time. There isn’t any mandatory requirement to transfer savings overseas.

Provided you maintain up-to-date contact details with your bank, it’s unlikely they’ll have any reservations about keeping your savings account live. The complication is that this isn’t entirely risk-free.

Interest rates may have been volatile and subject to dramatic fluctuations over recent years, but that doesn’t necessarily mean that spikes in inflation translate to generous returns on cash held in regular savings accounts.

Over the last 12 months, most banks have announced -0.4% cuts to interest offered, with even fixed-term products falling by -1%.

Inflation is a real risk and means the longer you leave your savings stationary, the less they will be worth, either because real-time inflation is higher than the rate paid or because conventional banks choose to offer interest returns that still guarantee a margin.

Based on average interest, rates from January to December 2024 varied from 2.82% to 2.59%, which means you’d have earned a modest £259 to £282 on a £10,000 balance, inflation notwithstanding. Hence, this is unlikely to be the most profitable option as a long-term investment strategy.

Balancing Risk vs Returns

We talk a lot about investment risk because it’s a fundamental factor when choosing which products to invest in. There isn’t a universal ‘right answer’, so it’s advisable to consult a professional wealth manager to assess your risk appetite and structure a savings vs investment plan to meet your retirement goals.

The normal rule of thumb is to save for immediate expenditures, such as an upcoming property purchase or paying for family tuition, and to have a proportion of your savings in an account or structure that is accessible quickly in an unforeseen circumstance.

Longer-term requirements, such as saving for your retirement, are usually better served through investment, given the higher potential returns.

High Yield Savings Accounts

A compromise between investing and saving is to look at a high-yield account.

This option is one of many, and the most suitable account and savings structure will depend on how quickly you might need access to your money and when you anticipate drawing on your savings.

Most high-yield savings accounts offer above-average interest, or even guaranteed interest, in return for a mandatory notice period before you can make a withdrawal. Often referred to as a  ‘notice account’ this means that you commit to depositing your savings for a minimum period or have to abide by a notice period before making a withdrawal.

Current interest rates available on this type of account are as high as 4.68%, compared to roughly 2.59% on instant-access accounts.

Fixed-rate bonds work similarly, but equally, mean you won’t have speedy access to your cash. Fixed-rate products offer interest from approximately 3.9% to 4.8% at the time of writing.

Overseas Savings Options for Expats

There are, of course, expat investment options abroad, so you could decide to retain your savings in a traditional savings account, either in the UK or by transferring your savings overseas. Other options include investing or transferring funds to a higher-return savings account.

It is worth highlighting, though, that ISAs aren’t a great option for most expatriates. While they offer security and tax efficiencies for UK residents, you cannot pay into an ISA or open a new one if you are a resident elsewhere.

The other options that you might wish to consider include:

• Offshore investment bonds: These essentially work as a life insurance policy in the form of a tax wrapper, which contains several investment funds.
• ROPS and SIPPs: Pension transfers are complex, but in short, they involve transferring your pension to a tax-efficient scheme with reduced limitations, higher lump-sum withdrawal access and a greater degree of investment freedom. Recently extended tax burdens on overseas pension transfers will be a decision-making factor if you decide to proceed.
• Property: Real estate investment is a common feature in expat retirement portfolios. That could include your primary home as well as rental properties that provide a regular passive income, in addition to appreciating assets held solely for their market value.

Of course, the returns available on these investments, while usually higher than those achievable through savings interest, will depend on where you live, how much you invest, and the level of risk associated with each specific product.

The takeaway, though, is that there are multiple ways to invest your savings safely to boost your wealth without the potential to lose out if inflation resumes or becomes a factor in the future.

Please visit the Chase Buchanan SIPPs vs ROPS Guide for more information about the aforementioned pension schemes.

The Advantages of Professional Expat Savings Advice

In any scenario, the best solution is to seek independent, tailored advice to ensure you make sound decisions about the right ways to leverage your savings to contribute to your retirement budget.

The correct strategy will depend on multiple factors, but a skilled adviser will assess your circumstances, evaluate your requirements, and make recommendations about the most suitable way forward. While potentially feeling like the safest option, leaving cash static in a savings account seldom is.

If you would like to discuss the most advantageous solutions for you or explore potential investment opportunities, please contact your nearest Chase Buchanan office.

*Updated February 2025