Posted on: 3rd March 2016 in PensionsMany expats ignore the financial aspect when moving abroad – therefore making it more complex than it needs to be during retirement planning. Read through 10 of the most common pension mistakes made by most expats in Dubai: 10. Not having a pension at all – People are living longer. Say retiring at 60 and living until the age of 85 with absolutely no income. All because you were late to start, and mind you that is 25 years of funding! It is of great significance that you make your own provision to save for retirement. 9. Delaying pension savings – When you do come to retire, it will ultimately depend on how much you have saved and for how long. The sooner you start building your pension pot, the bigger it will be when you reach retirement. 8. Living beyond means – Never underestimate the cost of living in a new and unfamiliar country. Your expat life in Dubai may become an illusion of reality – like being on holiday – absorbing the culture and enjoying the bright lights, especially when moving to a tax-free country of residence. 7. Ignoring the exchange rates – Currency fluctuations are a must to factor as an expat in Dubai. However, this is often under control as many have regular fixed withdrawals for mortgages, property payments and utility bills in their home country. 6. Not considering the taxes – A common mistake among expats in Dubai is not informing the HM Revenue and Customs (HMRC) of their decision to move abroad, relocation or international placement. This results in failing to change their tax status which leads to issues such as claiming tax relief or any tax refund they owe. 5. Knowledge of laws – As an expat in a country that implements Sharia Law, it is imperative to understand the difference of laws such as the rule of inheritance, estate planning, will writing etc. It is crucial as what may be acknowledged in your home country, may not be valid in a country ruled by Sharia Law. 4. Inadequate will writing – If you have written a Will in the UK, please be aware that it may not be applicable and/or recognized in Dubai due to Sharia Law. However, according to the Dubai International Finance Centre (DIFC) new rule – it allows a non-Muslim to register a will under the internationally-recognised common law principles and pass on their estates according to their wishes. 3. Unregulated financial advice – Bad financial advice is one of the biggest traps to fall for, and one of the worst mistakes an expat can make. It is similar to unlicensed doctors offering you a diagnosis (probably a misdiagnosis!). Pensions and retirement planning is not simple, therefore be wary where you get your advice. 2. Not reviewing insurance – Many life insurance policies in the UK are limited or offer no cover outside your home country. Therefore, anyone working or living in Dubai must have insurance in place to ensure proper coverage. Consider insurance for critical illness, serious accident and financial protection for you, your spouse and family. 1. Neglect pension contribution – Don’t fail to do your homework (research) on how you can continue to make pension contributions back home or set up the best alternative scheme when moving abroad. At the end of the day, everyone wants to live a fruitful retirement. We’ve all heard stories about an elderly couple who couldn’t afford their utility bill, and it is really happening. So, ensure to avoid these common expat mistakes and speak to a Holborn Assets financial adviser. Our team of advisers are prepared to help you manage and maximise your retirement fund prudently. We are prepared to offer the best understanding of your current financial position and options available in the future for a comfortable retirement.
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