Financial Disadvantages of UK Residents Retiring Early to France

The problem faced by many UK residents retiring early to France are as a direct consequence of changes in the retirement dates, recently implemented in the UK. What this means is that many who would be able to claim health cover under the French regime are now unable to and need private health insurance until reaching their official retirement age, recognizable by the UK government. This means that those of “working” age will be unable to have treatment within the boundaries of France which are not of an emergency status.

For many years, it was simple to transfer benefits to France, although with a tightening up of regulations, those who make the voyage to France to live before retirement date will have a limited amount of cover for health based on their contributions to the UK National Health payments. Instead of being granted the rights given to pensioners, those people who are under age may find themselves out of pocket when being treated for complex illnesses.

The way to address this is to take out adequate insurance, which is costly especially as old age approaches with private insurance firms who will take the brunt of the cost. This also means that the pensioner should also register locally with the Caisse Maladie Assurance to ensure that they do have adequate insurance cover for their needs.

The people this does not affect are those who are entitled to Invalidity. In this case, the rights of the individual are transferred to the French system via an E121 which is used to demonstrate to the French system that there exists an entitlement to medical reimbursements. The implication here is that upon reaching the correct retirement age recognizable in the UK, the recipient will find that what they receive at pension age may be less than they receive as invalidity payment, though will be entitled to health cover based upon their own contributions within the UK, or indeed a mix of entitlements within the UK and France.

It is worth planning retirement in France, as the financial implications are indeed complex. Often pensioners do not see the disadvantages of living in France and are clouded by an idealistic image of living a lifestyle they see portrayed on the television. Yes, fresh food and good health care are available in France, but at a cost. From the pension received, there needs to be a reasonable reduction allowed for in the exchange rate, as this affects what the household earns on a monthly basis. Often with exchange rates being disadvantageous pensioners are finding that they cannot afford to meet bills in France, and therefore have limited lifestyles.

The items which should be planned for before making the move to another country are the following:

Household expenses.
Cost of weekly food.
Car running costs.
Fuel costs.
Insurance costs.

All of these add to the burden of living in France and unless a calculation is made in advance, the viability of living in another country can be diminished.

Another cost to consider is that banks within the UK charge for each withdrawal from a cash machine, and that if money is required on a regular basis, this can mean a lot of extra expense. If it is possible to open an account with a bank or building society who do not charge for withdrawals it is advantageous to do so.

While there are many advantages to living in France, the financial side of this needs to be planned sufficiently well before the move is made. Investments in the UK will be subject to exchange rate costs, and may work out less on a monthly basis than anticipated, once the exchange takes place. If staying permanently in France, it is worth looking at investments within France where the returns are reasonable though also where the element of risk is limited.

Some of the savings plans and blivets with French banks offer advantageous interest rates, and because you will not be a tax payer in France, it is worthwhile looking into grants which are available on fuel on a yearly basis, and grants for home improvements. These help to diminish the cost of making the home more up to date and economically viable. Many make the mistake of doing their own installations of wood-burners or installation of double glazing for their own comfort without realizing that there are huge savings which can be made if all work is given to recognized installers.

The lifestyle in France is good. Fresh fruit, vegetables, meat and fish are in abundance. Supermarkets offer great promotions on items which are much more expensive in the UK, though judgment should never be clouded by comparing simple items which are less costly. The lifestyle consists of more than the price of cigarettes and alcohol, and certainly an overall financial plan should take into account the kinds of costs that one has to pay on an ongoing basis, rather than being tempted and lured by simple elements which cost less. Once the planning has been done, and the individual is happy that they can afford adequate health insurance, household bills, and have a relatively stable income to meet all costs, then of course it is possible to retire early to France and to take advantage of what the country offers its residents.