Over the last few decades, millions of people from the UK have made their homes in other countries around the globe. Many of these are younger professionals, entrepreneurs, and students, but retirees in particular make up a large chunk of this population of British citizens living abroad. Spain is the most popular location for British expat retirees, and it is estimated that there are around one million of them in the country, thanks mainly to the warmer climate and the lower cost of living than Britain.Two other popular expat locations are Australia, which presents few challenges in terms of language and culture, and France, which of course is right next door.
In the last few years however, many British expats have been returning home disappointed and discouraged by their experiences. News reports regularly talk about an exodus back to the UK, based on interviews with expats as well as studies conducted by various authorities and organizations.
Estimates vary – some have said that a fifth of all British expats are returning home, while others say the numbers are higher, and are closer to a third. Expats in Spain are the most affected, and some sources say that half of all British expats in Spain end up returning home. Local authorities within Spain itself have said that close to a million expats left Spain in 2013, a large number of whom were UK citizens.
Of those who return to the UK, some always intended to be short-term expats. In addition, new British expats continue to arrive in Spain and other countries. However, it seems quite clear by now that an unusual percentage of British expats have given up on their expat dreams in the last few years and many are continuing to do so.
Lack of preparation
Some expats simply fail to do enough research and planning before they leave the UK, especially when they move to locations that are perceived to be cheap, such as Spain. Many overestimate just how cheap a country like Spain is, and don’t account for the ups and downs of the economy. British retirees often relocate under the assumption that their UK pension will go much further abroad, without realizing the effect of a variety of factors on their budgets, including exchange rates, charges on international transactions, and a number of expenses that would not be necessary in the UK.
Many are also too optimistic about how much it will cost them to relocate and set up in their new location. In a more expensive country like Australia, such a lack of preparation can be particularly difficult to deal with. Many expats also focus almost entirely on the financial aspects of expat life, forgetting about other important factors such as a social support network and familiarity with the local culture, which can eventually turn into reasons to return home.
Among those who do think beyond the financial aspects, many have a dreamy, rosy picture of their destination, and are oblivious of the harsh realities until they actually get there. Expat life isn’t an extended vacation, but this is what many retirees expect, and unsurprisingly, they are eventually disappointed.
Lack of family support
The lack of family and close friends is always a major challenge for expats of any age. For retirees, this aspect of expat life can be even more difficult to deal with. The retirement years are usually when people have the opportunity to spend more time with their families, often living near their children and watching their grandchildren grow up. Living abroad means giving up all of this, except perhaps for a month or two every year (and international flights make a huge dent in one’s budget). Many expats eventually find that the loneliness and isolation are too much to deal with, and decide to return home. Retirement is also a time when help is appreciated – with housework, shopping, health issues, and dealing with legal and bureaucratic matters. Expat life means dealing with all this yourself, which can be stressful and exhausting, and can sometimes also add to your expenses.
Younger expats are typically also better able to meet people and form a support network in their new location, if for no other reason than because of their jobs. Although this isn’t entirely impossible for a retiree to do so, it does get considerably more challenging.
However, the most difficult situations are faced by couples who relocate together only for one partner to pass away. This is a devastating loss in any circumstances, but when it happens in a foreign country, without friends and family around, it is much worse. Most expat retirees in such a situation return to the UK.
Homesickness and failure to integrate
For many British expat retirees, it is simple homesickness that eventually drives them back to the UK. Missing family and friends is part of this, but they also miss British culture and the simple familiarity and homeliness of being in one’s own country. Culture shock is always a part of being an expat, but for most, this is a phase that they eventually get over. In fact, many expats adjust so well that they experience what is sometimes described as reverse culture shock when they visit or return home.
However, age can make it difficult to adjust to new ways of doing things. This isn’t to say that it’s impossible – many retirees settle into their adopted culture quite happily and comfortably. Nonetheless, many others do find it challenging to learn new habits and adapt to a new culture after 60-odd years of doing things a certain way. To some extent, this often comes back to a lack of preparation – many expat retirees are unpleasantly surprised by how much they need to change the way they do things in their new countries. Even Australia, in spite of the common language and the great cultural similarities with the UK, can present some challenges to older expats, especially those who aren’t fully prepared.
Often, expats also relocate with no intention of integrating with local culture and society, expecting to enjoy the benefits of the weather and the lower cost of living while essentially living in an expat bubble. Naturally, this isn’t entirely possible, and without a will to integrate, these expats have no understanding of the local language, customs, attitudes, and ways of doing things. As a result, every interaction with the locals, whether in the course of dealing with government and bureaucracy or on a personal basis, becomes frustrating and even unpleasant.
Issues with British pensions
The selective freeze on British state pensions is one of the major factors to have a negative impact on British retirees, making it extremely difficult for them to continue living as expats. State pensions typically increase every year in order to keep up with inflation, but this only applies to specific countries – mainly those that are part of the European Union and the European Economic Area and those that have a social security agreement with the UK.
What this means for a British expat in Australia, for example, is that their pension is frozen at the value it was at when they moved to Australia. As time goes by and inflation pushes prices up, it becomes more and more difficult to survive on a pension that is frozen at a value several years old. In order to overcome this problem, many British expats choose to have a private pension in addition to their state pension; unfortunately, this isn’t a viable option for everyone. Eventually, many expats return to the UK permanently, since this is the only way they can have their pensions once again linked to the rate of inflation.
However, the selective freeze isn’t the only reason why expat retirees have trouble with their pension. The currency exchange rate also affects how much a British pension actually works out to in a foreign country. Some expats find themselves in the happy position where the pound is stronger than the local currency, as a result of which their income effectively goes up.
However, the reverse trend, especially in the long term, can put expats in a very tight spot. Although it’s rarely a deciding factor, it does contribute to making an expat retirement less viable. Over the years, the fall of the British pound against the Euro has strained the finances of many expats to the point that they have returned home.
Economic and financial troubles
Of course economic and financial woes for expats extend beyond pensions and exchange rates. The global and local economic climate can make things difficult for all expats; however, for retirees, who have limited incomes based on their pensions and savings, the hit can be a lot harder. Many British expats moved to Australia years ago, when the cost of living was much lower and it was still possible for them to live a fairly comfortable life in a decent location. However, Australia is now among the most expensive countries in the world, and some reports rank it considerably higher than the UK.
In Spain too, the economic downturn has made things difficult for many expats. The prices of many items have gone up while property values have largely gone down. Many expat retirees also don’t fully retire, but instead work part-time or run small businesses to supplement the income from their pensions. With the Spanish economy being what it is, businesses are struggling, finding jobs is incredibly difficult, and salaries are low.
The availability or non-availability of certain benefits can also contribute to financial strain. The Winter Fuel Payment is one example of this – British citizens in certain countries, including France, Spain, Portugal, and Greece, are ineligible for this benefit because the average winter temperatures there are higher than they are in the warmest parts of the UK. However, the fact is that some parts of these countries do get quite cold in the winter, and older people in particular often need heating even in relatively mild weather. For these people, continuing to live abroad means bearing the additional expense of heating without the government support that they would receive back home.
Fears of a Brexit
An additional and more recent factor that is driving many expat retirees to consider returning home is concerns over what will happen if the UK leaves the EU. Healthcare benefits, state pensions, and many other services and benefits for expats are related to EU status, and have made it relatively easy for most Europeans to live almost anywhere within the EU. Currently, it is estimated that there are around 1.2 million British citizens living in other EU countries.
A Brexit may mean that these expats lose their right to use public healthcare in their adopted countries, and their pensions and other benefits will also be affected. Other laws and regulations would also change as they apply to Brit expats within the EU, making it more difficult for them to obtain visas, travel within the EU, and apply for long-term resident status. The pension issues that we discussed earlier would probably also apply to expats within the EU, since pensions would most likely not be upgraded to adjust for inflation. It may also be difficult for expat retirees to be joined in their locations by partners and family from the UK. Even if a Brexit does not occur, there are worries over the terms under which the UK will remain in the union.
Have you moved back to the UK after retiring abroad? Share your experiences in the comments.