As the cost of living continues to rise, it’s no surprise that some are looking to see where their money can go further – especially when it comes to hard-earned pensions and savings. Well, the good news is that there are plenty of countries offering long-term retirement visas where you can enjoy an excellent quality of life with a lower price tag. Sometimes less really is more – here’s our top selection.
How can you retire abroad?
Retiring abroad might seem like an impossible dream, but it is, in fact, completely feasible for many of us. As we’ve previously covered, it is often possible to take your pensions abroad, and with the cost of living in many of our favourite sunny destinations lower than the UK, it’s not always a difficult choice to make!
The other element that you’ll need is a visa. Normally these are contingent on a job offer, but if you’re planning to retire abroad, then you’re looking at a different category. These are usually known as passive income visas, whereby you aren’t supposed to work, but you enjoy the rights of other residents in return for living off savings, pensions and other investments.
Note that here we’re looking at year-round retirement; we have previously also written about how you can best manage your holiday home if you’re planning on shorter stays.
Where can you get a retirement visa?
You’re almost spoilt for choice, whether you’re looking in Europe or further afield. From Aruba to Thailand, a number of governments have decided to capitalise on a lucrative expatriate market by offering retirement visas.
If you’re dreaming of spending your retirement on a postcard-perfect Caribbean island, then Aruba may well be for you.
Known for its white sandy beaches, warm waters that average 26-28°C year-round, and a laid-back, small-town pace of life, the island’s popularity is no surprise. And if you’re looking to stay year-round, the good news is that, unlike much of the Caribbean, it’s situated outside the hurricane belt and is significantly drier than many of its neighbours, with just 500mm of rain per year on average.
A member state of the Kingdom of the Netherlands, Aruba nonetheless controls its own immigration policy and offers a retirement visa for those with guaranteed income. You’ll need to be over 55 years of age and have a guaranteed pension income or interest from a qualifying investment fund.
Long a popular destination for British expats and holidaymakers alike, Malta combines the glorious Mediterranean island lifestyle with the convenience of a country where English is an official language – and you can even drive on the left.
The visa in question is the Malta Retirement Programme, with its main requirement being that your pension will make up the majority of your income and you don’t plan to carry out any employment-related activities. You also need to either own property of a value of at least €275,000 in north and central Malta or €220,000 in south Malta or Gozo.
At just 3 hours 20 minutes from London and 3 hours 55 minutes from Edinburgh, living on the island also means you’re only a convenient short hop away from the UK.
Combining fabulous weather and extraordinary scenery with a rich culture and delicious food, Thailand was an obvious choice for our list. The size of the country means it offers some of the most diverse lifestyles among our selection, whether you’re looking for that always-on-holiday vibe on islands such as Phuket or the bustling vibe of a metropolis like Chiang Mai.
The Royal Thai Embassy outlines the steps to obtain an “O-X” retirement visa, which will grant citizens of specific countries, including the UK and the US, a five-year residency which can then be renewed for another five years. To apply, you need to be above 50 years of age and be able to show proof of funds of 3 million THB, either in a lump sum in a Thai bank account or split as 1.2 million THB in passive income and 1.8 million THB held in a Thai bank account.
Beginning in 2022, the government has launched a second Long-Term Resident Program, which targets high-net-worth individuals, including pensioners. This will give you a ten-year renewable visa, a tax exemption for overseas income and other benefits like fast-track service at Thai airports. If you’re planning to use it as a retirement visa, you’ll need either an annual income of 80,000 USD, or an income above 40,000 USD and 250,000 USD invested in Thai property, government bonds or investment vehicles.
Mexico is a well-established “snowbird” destination for retirees from the US and Canada, but the relatively low cost of living and excellent lifestyle is drawing people from further afield.
Puerto Vallarta, made famous in the 60s by the film “The Night of the Iguana”, is home to over 40,000 expats, drawn to its tropical weather and beautiful beaches. On the other side of the country, Playa del Carmen looks over the Caribbean Sea and offers the perfect mixture of small-town and resort living, although prices are higher than in Mexico on average.
As for how you can move here, you can apply for a permanent residency visa by economic solvency. To qualify, you’ll need to demonstrate proof of a stable monthly pension that’s greater than 500 days of Mexico City’s minimum wage. Alternatively, you can show that you have either investments or bank savings to the equivalent of 20,000 days of Mexico City’s minimum wage. As of July 2023, this would mean around £4,499.27 from pensions or a lump sum of £179,970.80.
Preparing for your retirement visa
Making plans for retirement abroad is a hugely exciting step – and the best way to ensure everything goes smoothly is to cover all your bases early. Among these is your financials: most retirement visas have a financial requirement, and most retirees will receive a monthly or lump pension payment. You’ll also likely have other international savings to think about.
As such, you need to consider carefully how you’re going to mitigate the risk of exposing those sums to the live foreign exchange markets. Due to currency volatility, what one sum will be worth one day is by no means guaranteed the next day or even hour.
Fortunately, there are solutions available, and it often only takes a simple hedging strategy to protect your money. Find out about how you can do just this by locking in a set exchange rate on our forward contracts page. Our foreign exchange specialists are only a call away if you have any questions!
Alexander is a writer specialising in foreign exchange and overseas property, with seven years’ experience helping people to purchase abroad and send money safely, including hosting seminars on the topics around the UK. You can find him out hiking, travelling and working from Spain in the sunnier months.