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Working abroad is an ambition for many rain weary Brits but is the growing expat community making the most of the financial opportunities on offer? Or is the lure of the beach and the golf course getting in the way of prudent financial planning?
Despite the tax free advantages of working in the UAE or the Cayman Islands, expats consistently outspend their domestic counterparts as a proportion of their disposable income. It is important that expats working abroad keep a strict budget and hold an emergency fund of between 3 and 6 months of costs.
Living a life in the sun might make every day seem like a holiday but expats should ask themselves how much of their earnings they can dedicate to financing their retirement. For instance in a territory with a lower tax burden than the UK should all or a proportion of the tax they would be paying be put aside.
It is also important to sweat every asset. If expats have been paying into a pension in the UK then a pension transfer through a QROPS or similar scheme should be actively explored.
While expats may be saving money in a low tax environment they may be hit with higher than expected living costs. Housing, medical and child care costs are often higher in typical expat destinations like the middle east.
Above all else British people who find themselves working abroad should work out their objectives, settle on a strategy and execute it ruthlessly. That way they will be sure to make the most of their time employed away from home.
