Planning a secure retirement in France

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22.01.25
retirement in France

Planning your retirement in France? Be sure to review your strategy early in order to minimise your tax liabilities whilst maximising your long-term financial security.

Are you already enjoying your retirement years?  Or is retirement just around the corner and you’re making plans for the future?  Even if you still have some years of work to go, it’s never too early to ensure that your finances are on track to comfortably fund your golden years.

Strategic financial planning is important whichever life stage you are at.  Once you are retired and drawing your pension, you still need to regularly review your arrangements to ensure they will continue meeting your goals and provide long-term financial security.

If you are hoping to live in France once you retire – and who can blame you? – you will have even more research and advance planning to do. Or maybe you are already living here and are unsure what your options are.

Whatever your situation, what do you need to think about now to secure the retirement of your choice?

Approaching retirement

Even if retirement is a way off, there are certain things you need to do make sure you are on the right track financially. There may be steps you can take today to help make your dream retirement a reality.

Questions you should ask include:

  • Will I be able to afford to retire when I want to?
  • What is the best strategy for withdrawing from my business or employment?
  • What options will I have for my pension funds?
  • Will I be able to retain my existing wealth and assets?
  • Where do I want to spend my retirement years?

Let’s say that you plan to retire within the coming years and move permanently to France. You may have concerns about whether you can maintain your lifestyle without having to sell existing assets or downsize your home. Perhaps you have a business to sell and are unsure how best to convert your years of hard work into a tax-efficient retirement nest egg.

Then there are the complex residence, tax and succession implications of living in France which you need to research – you may be surprised at how different the French regimes are to the UK’s.

Here, professional financial advice can prove invaluable. An adviser can take a holistic view of what you have – your savings, investments, assets, pensions – together with what you want – your timeline, income requirements, legacy wishes – and an objective assessment of who you are – your circumstances, goals, risk appetite – to design a personalised retirement plan for you.

Already retired

If you are already retired, that does not mean you should forget about retirement planning. After all, you could be retired for thirty years or more!

Remember that inflation can be detrimental to a long retirement.  Even low inflation will have a big impact in the long-term, when you will find your money does not go nearly as far as it used to.  Bank interest rates often struggle to keep up with the cost of living, so invest your savings wisely to generate enough capital growth while keeping risk to a comfortable level for you.  You also need ensure that spending too much of your savings in early retirement won’t have a detrimental impact on your lifestyle in your later years.

Regular reviews allow you to adapt your strategy to suit your changing circumstances and goals, such as incorporating new family members, addressing health issues or relocating. It also enables you to keep up with the ever-changing tax and pensions landscape.

Your pension options

Pensions tend to be the foundation of retirement, so deciding what to do here may be one of life’s most important financial decisions.  UK pensions are always complex, but with all the reforms, not to mention all the options for how you take yours, you must take great care.

You might benefit from consolidating several UK pensions into one to provide a coherent, more cost-effective investment platform for your retirement income.  But you also need to consider the French tax implications of the various options and compare their tax efficiency. Also, remember that receiving pension income in sterling when you spend euros on a day-to-day bases exposes you to conversion costs and exchange rate risk.

British expatriates have the option of transferring UK pensions to a Qualifying Overseas Pension Scheme (QROPS). This has been a popular option since it can unlock advantages such as flexibility to take income in euros, more freedom to pass benefits to chosen heirs and protection. The UK October budget, however, extended the 25% Overseas Transfer Charge (OTC) so that it now impacts most British retirees living in the EU, including France.

Take up-to-date cross-border advice before making any significant pension decision to protect your benefits and establish the most suitable option for you under the latest reforms.

Retirement in France

If moving permanently to France is on the cards, it is especially important to review your retirement strategy early. Not only will you need to consider your residence status and cross-border tax implications, you will need to adapt your estate planning to suit the very different French succession rules.

Preparing in advance can reap many benefits, such as lowering taxation and avoiding France’s forced heirship rules.  For example, there are various ways of owning property in France, which can impact succession rights and tax, so explore your options and understand how they relate to your family circumstances – particularly if you and/or your spouse have children from a previous relationship or you are not married or in a civil partnership.

In any case, careful planning is the key to minimising taxation and maximising the available opportunities so that you can enjoy your dream retirement with long-term financial security.

Blevins Franks has 50 years of experience supporting UK nationals moving to and living in France with specialist tax planning, as well as pensions, estate planning and investment management services.

Contact a locally-based adviser today.

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

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