Elaine FergusonRetired expats looking for a low-risk way to invest for extra income should consider buying an additional State Pension, said OverseasGuidesCompany.com in October, adding that for many Brits on the verge of retiring abroad, the UK Government’s brand new pension top-up scheme could represent far better value than investing in a typical annuity.


“Qualifying pensioners, including those who reach State Pension age between now and 6th April 2016, can apply for additional lifetime income worth up to £25 a week or £1,300 per annum, which equates to €1,755 for expats in Europe, going on the current exchange rate,” said Elaine Ferguson, Head of the Overseas Guides Company.com. This is paid on top of the flat rate pension, currently £115 a week.

“A pension top up will make sense for many expats who favour safe regular income, thanks to it being guaranteed for life, inheritable in most cases, and protected against inflation – at least for people in the UK, all European Economic Area countries, the USA and a number of other countries. They also appear to represent good value – according to the Institute of Fiscal Studies, to achieve £1,300 a year through an annuity would typically cost double what it will through the top-up scheme.

“The cost of a State Pension top up is based on a person’s age and takes average life expectancy into account. For a 65-year-old, an extra £10 of pension a week will cost a one-off sum of £8,900, whereas for a 75-year-old, the same increase will cost £6,740. However, the top-up scheme might not suit everyone’s situation, including anyone living in or moving to countries where UK pensions are not index-linked, meaning that your pension income remains flat for your lifetime. These countries include Australia, Canada, New Zealand and South Africa.

“It’s also important to remember that there is a window of just 18 months, starting on 12th October 2015, to take advantage of the scheme, so don’t leave it too late – but as always, seek professional help from an independent financial advisor to ensure you are making the right decision.”

OBG-SpainWritten for Fuertenews.com by Elaine Ferguson, Head of the Resource Centre and country specialist at SpainBuyingGuide.com. For more information about emigrating to, buying property, or life as an expat in Spain, click here or call +44 207 898 0549.

SmartDavid Comber is a Senior Trader at Smart Currency Exchange. If you want to hear more about how Smart Currency Exchange can help you get the most from your money when making transfers to Spain, you can give them a call Freephone on +44 808 163 0102 or register online at smartapplyonline.com

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