Thousands of British expats retire to Australia, but those who go without a plan face a financial nightmare. The Australian government has some tough rules for expats – even the British. They will want to see that any potential long-term resident has enough money to pay their way.
Australia does not have a free at the point of need health service and social security system like the UK. Private health cover for older expats can work out expensive, so factor this into your budget before you go to avoid a nasty surprise. Health is a big factor in how much retirement cash an expat needs.
Health and retirement
Someone with a lifestyle condition like a smoker, someone overweight or with heart problems should not expect to live as long as someone in perfect health. Any incomers must be able to demonstrate to the authorities they have the cash or the capability of earning the money if they want a residency visa.
The problem with that is the variables – such as how much money do you need, how long will you live and what you plan to spend your retirement cash on.
The news is good and bad. The downside is the cost of housing in the big cities like Sydney and Melbourne is on a par with prices in London and the South East.
That said, in Australia, wages are good and the cost of day to day living can be lower, however, imported luxuries will be more expensive because of the cost of shipping.
British expats do pick up the state pension, but the bad news here is the payment is not index-linked, so will not increase beyond the initial payment. From April 2017, that is £159.65 a week or around £6,300 a year.
The key to settling on a sensible retirement budget is to be realistic about your lifestyle and spending. If you have limited resources and want to live the high-life on cruises or perpetual holidays, then you will soon run out of cash.
If you want to maintain your current lifestyle, aim for a retirement income of about two-thirds of your salary – and don’t forget to add in that £6,300 a year state pension.