Imagine Retirement Starts Tomorrow

Please be advised that the information in this article regarding QNUPS and IHT is no longer accurate due to the recent changes announced in the UK Budget. Starting in April 2025, the regulations will have significant implications that may affect your understanding of these topics. We encourage you to stay informed and consult with a Soteria Trusts expert to navigate these changes effectively.

If you were asked how much money you would need to keep the lifestyle that you enjoy for the next year, how would you reply? Let’s change that a little and now ask yourself if you were going to write yourself one cheque and the money that you gave yourself had to last you for a whole year, what numbers would you be writing on the cheque? The amount would need to be enough to ensure that you have enough cash to last you, your spouse, and possibly even your family for one year in retirement. If you have a number in mind, that’s great! But, if you don’t, use our simple retirement calculator to give you a rough idea of where you are at and how much savings you still need to have to get the ideal retirement income you want.

Most people say they could live comfortably on 75% of their income immediately before retirement; however, some prefer to have the same income in retirement or even more. Once you’ve established that percentage, our simple retirement calculator will reveal the target retirement fund needed to provide your desired income level.

A retirement fund planning for expats

More often than not, the amount you need to save to reach your desired retirement goal is above what you can save from your income each year. Therefore, you should explore different savings or investment options to help you achieve that goal. No matter what your financial situation is right now, there are plans and solutions available to help you do the very best for your retirement. In addition, your expatriate status can give you a significant financial leg up the pension ladder, and you will feel much better about your future knowing that it is financially secure. By saving regular amounts, however modest they are, you can make a significant difference and avoid financial disaster. 

Why is retirement savings different for expatriates? 

When you’re an expat, there are a number of factors to consider when planning your retirement, the first is identifying a location or locations that you want to spend your time in when you retire, other factors are your eligibility for pensions and your nationality. Of course, tax considerations are among the most important ones as nobody wants to be taxed twice or pay more than they need to! 

Establishing when and where you want to retire

Planning financially for a comfortable retirement is essential if the thought of working beyond a particular age or having to depend on others worries you. It begins by knowing where you wish to retire and how you intend to fund it. However, the challenge for many expats is not being able to predict where they will retire, which can make the retirement process harder, but that’s not a good enough excuse to put it off!

How your Nationality affects your retirement savings?

Expats working abroad must also consider and learn about how their Nationality affects their local and international savings and pensions. Where are they going to be taxed and how much? Is it advisable for them to transfer their savings to other jurisdictions to save money or reduce future taxes? 

Too much money

Although expatriates tend to earn more than their local counterparts, their frequent movement can work against them, as it prevents them from forming coherent financial and retirement plans. With more money to save and invest, other issues may arise, such as international taxation – and, most importantly, how to pay less on the hard-earned money. 

Multiple pensions 

Some countries recognise pension arrangements made in other countries. This makes it relatively easy to transfer retirement savings, with the note that such transfers can generate additional fees. However, some countries do not make it easy to transfer pensions, and expats are being left with a number of pension pots in different countries, which, if not properly managed, may be eroded by fees and poor performance.

How are you funding your retirement?

Besides having multiple pensions in different countries, you may also have personal savings accounts or private investments, including stocks or investment property that you wish to rely on for your retirement. Are they set up in a country that allows you to easily access or transfer to your retirement destination? How are these taxed? Will these assets be easily passed to your family if you pass away before spending it all?

Are you on track with your retirement planning?

Were you a little shocked when you saw your retirement shortfall from the Soteria Trusts Retirement Calculator? It can look daunting at first, but the good news is that there are so many retirement savings options available to you, some of which give you tax benefits, financial benefits, and flexibility benefits on top of the investment returns. Let’s look at a few of them now. 

Soteria Retirement Plans 

Soteria Trusts has several retirement plans to choose from. Each of them is available to all nationalities and is a form of personal or private retirement plan, with portability in mind. The way they are set up helps solve some of the tax and retirement destination conundrums expats are faced with when planning for retirement.

Investment platforms

Soteria Retirement Plan is tailored to your needs and can house a platform that allows you to choose between different investment funds and ensures tax-free growth on any new investments as well as on any existing assets you decided to transfer into the plan. 

Tax-efficient – Double Taxation Agreements 

The Soteria Retirement Plans are either Trust or Contract-based and have been established in jurisdictions that are tax-favorable for most Nationals. Those tax benefits come thanks to the Double Tax Agreements (DTA) that are in place, meaning that the income distribution will be taxed in one location – where the income tax is lower than in their home country.

UK Inheritance Tax mitigation

Soteria Trusts’ retirements plan have additional tax mitigation features which are useful not only to British expats but to anybody who has UK-sited assets, such as investment property, a business, or any other type of asset. Investments and assets, including property, once placed into a Soteria Trust’s retirement plan are immediately Inheritance Tax-free, which translates into huge (up to 40%) savings on any estate tax liability in the UK. 

If you want to get on track with your retirement planning and to know the most tax-efficient way of staying there, then don’t delay any longer. Get in touch and one of our advisers will get you started.