Last Updated on 13th January 2026
We all look forward to retirement as a relaxing, rewarding period of our lives when we can step back from the pace of working life. Expats choose to make the most of this time to relocate to their preferred destinations, often selecting locations with lower living costs and beautiful weather to reap the rewards of their years of hard work.
However, how can you ensure you have the resources and income to make the most of your retirement? Any prospective expat or foreign national living overseas requires accurate, reliable forecasts well in advance of retirement to be able to take action now to fill gaps in their future income streams that they will rely on.
In this guide, we advice on how to estimate your retirement living expenses and highlighted just a small selection of the potential investments, savings, pensions and other products you may need to incorporate into your budget.
Calculating Retirement Living Expenses
The starting point for planning for a comfortable retirement is to evaluate how much income you will need to maintain your quality of life and the standards you expect. One of the simplest ways to approach this task is to break down spending into categories.
If you’re planning to retire abroad from the UK, this also means taking into consideration exchange rates and the costs of your relocation, because living costs and buying a property can present a very different budget than if you were to retire in Britain. You’ll need to ensure all additional expenses involved in your relocation have been budgeted for.
Assessing Your Essential Expenses in Retirement
Non-discretionary expenses are unavoidable costs. This includes rent or mortgage payments, basic ongoing living expenses, debt repayments, anticipated tax liabilities, and the costs of applying for a retirement visa.
Evaluating the cost of living in your intended retirement destination ensures you have a good idea of the monthly or annual income you will need to cover utilities, food, and supplies, the private health insurance that is typically a mandatory visa condition, and anything else that you feel is necessary to be able to enjoy a relaxed lifestyle in retirement.
If you are unsure about the cost of living or local prices in your planned place of residence, now is the time to research average costs to better understand what your weekly and monthly outgoings will look like.
Non-Essential Expenses When Retiring Abroad
Discretionary expenses are spending that is not vital but that you would like to budget for. This could include travel, holidays, charitable causes, luxury purchases and home renovations.
Many British retirees opt to invest in a new home overseas, which requires careful planning that accounts for the cost of the residence you’d like to buy, the professional fees associated with purchasing a new property and those you’ll incur if you plan to sell your UK home.
UK citizens planning to retire abroad should also look at how many times they would like to travel back to the UK each year and whether this will have an impact on their tax residency position.
You may also need to take into account any possible future changes in circumstances, such as plans to support family members with education costs, alongside a contingency, should anything change in the interim.
Planning Ahead by Projecting Pension Income
Several factors will impact the projected value of your retirement income and savings, including the rate of investment growth, inflation, and annuity rates.
Annuity rates determine the regular income receivable from your pension plan. An annuity rate is shown as the value receivable per annum against every £100,000 of investment. For example, an annuity rate of 5% means that you receive £5,000 per year for every £100k invested.
As a rough idea, an expat with a £500,000 pension pot, plus eligibility for the full UK State Pension, might anticipate receiving an annual income of just under £32,000 in retirement – although this is an estimate and pre-tax, which means your net earnings could differ.
In addition, almost every country will have different taxation rules than you are used to, and you must understand aspects like your access to a tax-free lump sum drawdown, the rate of tax you’ll pay on regular pension benefit payments, and your total net income.
Types of Pension
There are several types of pension schemes, including state and private pensions, and many expats hold several funds, all of which should be assessed to analyse the anticipated income receivable. If you have a forecast shortfall in your retirement plan, you might also wish to invest in additional pension products to top up your future income.
Workplace Pensions
With the introduction of auto-enrolment pension schemes back in 2012, more employees than ever will now have at least one workplace scheme, with contributions automatically deducted at source from their salaries and an additional contribution made by the employer.
Your pension provider should be able to give you a pension value estimate, and if you are unclear on any aspect of your workplace pension and the payable value on retirement, it is advisable to get in touch with your HR department or scheme provider.
Private Pension Schemes
Private pensions are those you take out independently, and there are countless pension products on the market. The right scheme for you will depend on factors such as how much you have available to invest, the level of risk you are comfortable with, and the required income you need to supplement your other pension income.
The UK State Pension
Most UK retirees are eligible to receive the State Pension on reaching retirement age, provided they have made sufficient National Insurance Contributions. Currently, this is set to a maximum of £230.25 per week.
Knowing whether you will be eligible to continue receiving your State Pension when you move abroad is important, especially since access to the annual uplift, or triple lock, will depend on where you choose to move. In some countries, your State Pension will remain static at the same rate payable at your point of relocation, and in others, you will continue to receive an increased pension income annually.
If in doubt, you can contact the International Pension Centre, which will also need to be informed when you relocate.
Other Potential Sources of Retirement Income to Incorporate Into Budgets
Pensions and annuities are, of course, only part of the retirement portfolio most UK nationals build over the years, and when budgeting, you’ll need to incorporate all of your assets, including those summarised below.
Savings Accounts
If you hold savings accounts, you may need to check the availability of accessing funds, especially if you hold notice accounts or fixed-rate bonds. You may also benefit from investigating whether there are alternative products that might provide a higher interest return.
Individual Savings Accounts (ISAs) are a commonly used type of long-term savings account that offer tax-free growth, with caps on the maximum contributions. While ISAs are tax-efficient for UK residents, these benefits cease to apply once you relocate, and you will not be able to make further contributions, which can mean planning to withdraw savings funds in advance to restructure.
In addition, the tax treatment of savings withdrawals can make a big difference to the net value you receive, so you should verify the tax liabilities payable on your savings and how these will change in your new country of residence, before planning when to draw down and how to allocate these funds.
Property Ownership
Retaining property assets can be a way to generate a passive income through rental earnings, benefit from appreciation over time, or add to your real estate portfolio, whether you already own property assets or intend to acquire new properties in the UK or overseas.
Although property investment is generally perceived as safe, you should consider the level of risk you are willing to take since the market value of a property can vary considerably over time, although gradual appreciation tends to be the norm.
UK expats almost always need to make decisions about whether to retain their properties as a source of rental income or sell their homes to provide capital for a new property investment overseas, and this requires professional advice around the tax obligations arising and the potential to incur future UK inheritance tax that may affect their beneficiaries.
The duties, fees and costs of purchasing a new home outside of the UK will depend on the local market and the tax rules in that jurisdiction, so you’ll need to factor in those associated costs – and the net revenue the sale of your home should generate if you plan to sell.
Stocks, Shares and Other Investments
Investment assets such as stocks and shares will usually provide regular income in the form of dividends. When you are calculating your income during retirement, you’ll need to factor in these earnings, but you should also incorporate tax liabilities and allowances to ensure you have a clear picture of the net income you’ll receive
Tax rules and legislation vary considerably between countries, so you will need to know which obligations will arise when you receive dividends or other returns, and whether there are opportunities to restructure your investments to gain tax efficiencies.
Investment taxation will depend on your residency position, and careful planning may be required to ensure that you claim double tax treaties correctly if there is the possibility of attracting tax charges in both the UK and your new home country.
Looking Ahead to a Financially Secure Retirement
Planning for your retirement ensures you will be able to relax and enjoy this time in the lifestyle you expect, and there are multiple options that range from investing, saving, contributing to pension funds and creating passive income streams.
If you need help planning for retirement, making sense of the tax liabilities in a different country, or deciding how to manage your property portfolio, get in touch.
Chase Buchanan Private Wealth Management is a global specialist in expat wealth management and financial advisory support, and we can begin with a full portfolio review to ensure you begin budgeting for your retirement abroad with assistance from an experienced team of professionals.
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Chase Buchanan Ltd is authorised and regulated by the Cyprus Securities and Exchange Commission with CIF Licence 287/15 and offers its services in the EU on a cross-border basis as per the provisions of MiFID.
Chase Buchanan Insurance Services, Agents & Advisors is authorised and regulated by the Cyprus Insurance Companies Control Service with License No 6883 and offers services in the EU on a cross-border basis as per the provisions of the Insurance Distribution Directive (IDD).
Investing in financial instruments involves risk and may not be suitable for all investors. The value of investments may go up as well as down and past performance is not a reliable indicator of future results. You may lose part or all of your invested capital.
*Information correct as at December 2025
