I’m Retiring Abroad Do I Need an Offshore Bank Account?

Confusion reigns when it comes to getting bank accounts sorted out for a move abroad.  People are advised incorrectly, read misleading information and generally are not sure whether any action they take is useful – or even legal.  And with the news out today that the police in Britain are chasing targets and seeking to convict more middle-aged people than ever in a bid to “hit their numbers,” soon-to-be retirees certainly don’t want to do anything illegal with their cash!

The facts of the matter are incredibly straightforward when it comes to sorting out banking arrangements if you’re moving abroad, and in this report we’re going to answer the theoretical question ‘I’m retiring abroad, so do I need an offshore bank account’ as well as a number of other pertinent and frequently asked questions about banking for retirees moving overseas.

The report will cover all a would-be retirees options and alternatives, it will make some recommendations and suggestions and help anyone who’s thinking of retiring abroad to get their money matters in order before they go.

Am I allowed to keep my British bank account open?

There’s a lot of misleading information reported about people being in the wrong if they keep a British bank account open when they move abroad.  However, we have never come across a bank yet that disallows their customers to keep a basic current account open.  Non British residents who are living and paying tax abroad are not allowed to open new ISAs, and those in a similar position who continue to save back into a British pension will not receive tax relief – but those who move abroad to live, work or retiree can keep their British bank account open.

Is it worth keeping my UK account open?

Only you can answer this question correctly as it is a personal choice.  However, there are more reasons for than against keeping a British account open and running.  If you’re moving abroad temporarily, or even if there is the remotest chance you will one day want to return to the UK then yes, keep your account in place.  It is a nightmare trying to repatriate and establish residency quickly in order to open a new bank account and to begin building up a credit rating again.  If you keep an account open, such worries won’t befall you.  If you have any financial commitments in the UK or if you use British websites to order any goods or to arrange travel back and forth when abroad it can be useful to have a British bank account.  You can receive payments from renting out your home in the UK into your British account for example, and you can also receive your pension income into it.  The only time it doesn’t really make sense to keep an account open is if you’re trying to become domiciled elsewhere – i.e., if you’re trying to lose your British domicile status in a bid to be accepted as domiciled in the new nation you’re resident in.  If you’re trying to do this, you need to turn your back on the UK 100% and this will include not visiting, not having a bank account and ideally not having any family or friends even living in the UK.  It’s quite an extreme measure to take and it’s usually only done for tax purposes.

If I have a British bank account do I still need to open an account abroad?

Again, it’s up to you to answer this one, but it usually makes 100% sense to have an account in your new nation of residence for the payment of day to day goods, services and amenities.  It can even be a requirement to have a local account in many nations if you want to have your utilities in your name, you want a mobile phone or if you want to get a credit card one day or even a loan or a mortgage perhaps.  It doesn’t always make sense to keep the majority of your cash in this account however – because why draw attention to your wealth in your new nation if you don’t have to.  What’s more, if the country you’re living in has a less than stable banking system, economy or currency, (much like the UK!), then it doesn’t make sense to keep all your working cash in what’s called an ‘onshore account.’

So, I’m retiring abroad, do I need an offshore bank account?

As we have identified, it can make sense to keep your account open in the UK and to have an account in your new nation of residence for the day to day ease of regular payments – but it may not make sense for you to keep all your cash onshore in your new nation, and it probably makes very little sense to keep it all in the UK when you can make use of an offshore bank account where you may gain taxation advantages as well as massive flexibility and confidentiality advantages.

In this day and age offshore banking is no longer perceived as illegal – that was a myth put about by governments who didn’t want their citizens taking their wealth out of their nation!  And for expatriates – i.e., those living abroad – an offshore bank account is often the most flexible solution for their wealth.

Is an offshore bank account the best place for my money?

Whilst it is absolutely essential to have a certain amount of your wealth close at hand and easily accessible, it makes no sense whatsoever to hold all your cash in a low interest earning current account – whether that account is onshore, offshore or in your old home nation.  Instead there are many attractive and potentially highly beneficial offshore saving and investment alternatives that could help you to make the most of your money.

You need to explore the options available to you with an expatriate financial adviser as soon as you move abroad – and then you can make sure you’re making the most of your pension income, the most of your wealth and the most of your ongoing financial status.  If you would like to receive advice from our pool of recommended advisers, you just need to complete our offshore advice form and someone will be in touch to answer all the question you have.  Remember, we offer a no obligation, free service to all our readers.