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Part 5: Retiring to the UK - 4 areas which you need to consider

Simon Cahill19 April 2021

This article is part of a series. Please scroll to the bottom of the page to see all the articles in the series.

If you have seen out your working days in the UAE, you may well now be considering swapping the Middle Eastern sand for the British countryside and retiring back to the UK to enjoy your well earned time off.

Part 5 of this series will focus on:

  1. Retirement age
  2. The UK State Pension
  3. Pensions and drawdown income
  4. Long term care

1. Retirement age

Your specific retirement age will of course depend on your personal situation and the nest egg you have accumulated throughout your working life, as well as the amount you intend on spending over the next few decades.

If you haven’t undergone any form of cashflow forecasting/modelling, I would highly recommend that you either attempt this yourself ASAP, or speak to a professional.

Lifeline Octopus Wealth are offering to create a bespoke and free personal Lifeline for former UAE expats with pensions and investable assets valued at £250,000+, (usually valued at £2,000). If you would like to take advantage of this offer and arrange a 60 minute discussion around your asset base, please get in touch.

If you have a UK workplace pension, the most common age for retirement tends to be 65. This is the point at which you may begin to draw your pension benefits.

If you have a personal pension such as a ‘self invested personal pension’ (SIPP), the current age at which you can begin to draw benefits is 55. Consequently, 55 tends to be a reasonably common age for those who have saved enough and are fed up with work to think about retiring.

2. The UK State Pension

We touched on this briefly in Part 4 of this series in the National Insurance section. It may be worth referring back to this if you have gaps in your national insurance record and are considering filling these. You can jump to it here if necessary.

As of October 2020, the State Pension age will increase to 66 for both men and women. It is then scheduled to rise to 67 between 2026 and 2028.

There are currently 2 types of State Pension in the UK:

  1. The Basic State Pension
  2. The New State Pension

The below table highlights the key information for the two schemes as at 6th April 2021. If you would like to read more about them you can access the Basic State Pension and the New State Pension on HMRC’s website.

State Pension As you can see, relying solely on either State Pension will not get you particularly far, but it is a no risk, inflation linked asset which can help to provide part of your retirement income.

If you are at State Pension age but do not require the income, deferring may be an option for you. The rules differ depending on which scheme you have and are outside the scope of this guide but if you have questions on this, I would be happy to answer them for you.

Make sure you check your State Pension forecast so you know how many qualifying years you have and what you are entitled to. You can do this here.

3. Pensions and drawdown income

‘Pension simplification’ was supposedly introduced in 2006. However, anyone who has spent time sifting through the plethora of rules and nuances to do with pensions will tell you that the government may have missed its mark on this one.

What you may have missed during your time offshore is the introduction of ‘pension freedoms’ which was introduced in 2015. Truer to its name (perhaps they learned from their mistake?), this did actually provide much more freedom relating to how you can access your pension.

The traditional shopping around for an annuity still exists, but there are now considerably more options allowing you to access your pension as and when you require it. With the current rules, if you would like to take a lump sum at retirement, the first 25% of this will be tax free, with the remainder subject to income tax.

Alternatively, you can opt to drawdown your pension, taking the income which you require but leaving the remainder invested to generate growth.

You should consider these options carefully in line with your wider income requirements.

Two points to remember:

  1. As a UK resident, you will be liable to income tax on the majority of your pension, although your annual personal allowance can be used to offset some of this.

  2. Pensions fall outside of your estate so if your intention is to pass on wealth, they may be the last place from which you look to draw income.

These conversations and considerations are firmly in the realms of financial planning so if you have questions or need assistance with your retirement income planning, please do get in touch.

4. Long Term Care (LTC)

Long Term Care Many of you will have experienced long term care through relatives. Having personally experienced it with my own relatives, and also having worked with families who didn’t plan for it, I would strongly recommend that accounting for the need for long term care is something which you should factor into your own retirement planning.

How long will I live?

Currently, in the UK, if you are female and aged 60 years old, you have a life expectancy of 87.

It’s 85 for men.


Women Men

Men These figures are too high to not financially plan for. As the old saying goes, it is much better to run out of life than it is out of money!

Of course, if you are younger than 60 then your chances of living longer significantly increase. You can view your specific life expectancy on the Office for National Statistics website. With these stats in mind, it is likely that at some stage in your life, you may have a need for long term care.

How much does LTC cost?

The costs can vary greatly depending on location and level of care. If you are in or around London, many care homes cost in the region of £80,000 per year. Other areas of the country can be cheaper or more expensive, with some care homes costing over £100,000 per year.

How long will I likely require care for?

In the UK, the average length of time spent in a care home tends to be between 2 - 5 years. Of course, if you are planning ahead, it pays to be prudent so assuming that you were paying £80,000 per year for 5 years, this would set you back £400,000 in today’s terms.

What should I do?

The purpose of outlining these figures is to highlight the potential costs you may face in retirement which you may not have previously considered. If you have previously undergone cash flow modelling for your retirement, long term care should have been factored in.

If it isn’t, or if you haven’t undergone any financial forecasting yet, please get in touch and I would be happy to model a financial lifeline for you. The sooner you start planning for these things, the easier they are to navigate.


There is a lot to consider if you are at the point of retirement and wish to return to the UK, particularly from a taxation point of view. Forward planning will serve you well but if this is not possible, hopefully the information in this guide is of benefit to you.

Taking the right advice can help to make your move home a much smoother transition and ensure that nothing is overlooked.

Myself and Octopus Wealth are specialists in working with people in this position and can assist from the very beginning. We do this through initial conversations on what to look out for, as well as financial planning advice and guidance once you return to the UK and throughout your retirement.

The benefits of this are:

  • It removes any worries which you might have had; and
  • It ensures you know exactly where you are, meaning that you can live the retirement which you had hoped for.

In Part 6 of this guide I will highlight 6 things to organise once you’re back in the UK.

Part 1: How to successfully leave the UAE

Part 2: What to do with your assets abroad?

Part 3: UK bank accounts and property: the 6 expat scenarios

Part 4: UK tax: 8 points which could save you money

Part 5: Retiring to the UK: 4 areas which you need to consider

Part 6: You’re back in the UK: 6 things you need to organise

Part 7: Financial advice in the UK. Do you need it?

Important information

Circumstances vary for individuals and any personal opinions or firm opinions represented above should not be seen as advice or a recommendation to take any specific course of action.

We are not tax advisers. The value of an investment, and any income from it, can fall or rise. Investors may not get back the full amount they invest. Past performance is not a reliable indicator of future results.

Personal opinions may change and should not be seen as advice or a recommendation. This post is based on current legislation as at the time of writing, which is subject to change and will not be kept up to date. This document is for UK retail investors.

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