How to Retire in the UK as an American

Before you reach retirement age, you should consider where you want to spend your golden years. There are plenty of excellent options, such as Portugal, Spain, or the Caribbean, but people rarely wonder how to retire in UK as an American.

The UK seems like something other than the idyllic destination the Mediterranean offers and will barely be a consideration for many. However, there are some great reasons why the UK is the perfect place to retire.

In this article, we’ll tell you how to retire in the UK as an American, what you’ll need to kickstart the process, and how the cost of living compares to the US.

UK Retirement

Retiring in the UK as a US citizen can be an attractive opportunity for various reasons, which are deeply personal but also connected to broader lifestyle, cultural, and financial factors.

The UK has a rich history and culture, offering diverse experiences from ancient ruins and castles to cutting-edge art and theater. The United Kingdom is an appealing destination for history enthusiasts or those who want to immerse themselves in a place with a deep and varied cultural heritage.

For retirees, especially those worried about the increasing cost of healthcare in the US, the UK’s healthcare system can offer a sense of security and financial predictability. The UK’s National Health Service (NHS) provides residents access to primarily free healthcare at the point of use, funded through taxation.

The absence of a language barrier can also be a significant advantage for US retirees. Since English is the primary language, navigating daily life, from healthcare to legal matters, is significantly less challenging than in countries where learning a new language is necessary.

Beauruacratic Intricacies

Until a few years ago, the UK had a relatively successful retirement visa program. However, after the UK government recently closed the initial retirement visa, retirees had only a few options for settling in the British Isles. Retiring in the UK might be more complex than other schemes like Portugal’s D7, Spain’s Retirement Visa, or those of other European countries.

However, those still interested in retiring in the UK can explore other options, such as visas based on family connections, investment, or other eligibility criteria that may allow for a long-term stay in the UK.

Retirement Visa Options

Work

Working might be the last thing on your mind when you are looking to retire, but it is a viable option to settle in the UK. To be eligible for “Indefinite Leave to Remain,” a work visa involves committing to live and work in the UK for at least five years.

However, if you have a tier 1 visa, the minimum requirement is two or three years, depending on the specific type of visa. Suppose you hold an Innovator Founder or Global Talent visa. In that case, the minimum requirement is three years of living and working in the UK before you can apply for permanent settlement status.

Tier 1 visa: An entrepreneur can apply after three years if you have created the equivalent of 10 new full-time jobs that existed for 12 months or you generated £5 million in business income in three years.

The time it takes for an investor to get ILR depends on the amount invested. You must have invested a minimum of £2 million in share capital, loan capital, or UK government bonds in active UK companies within three months of your ‘investor start date’ to get settlement status in five years. This can be reduced to two years if you invest £10 million.

Tier 2 visa: Skilled Worker or Minister of Religion who earns £25,600 per year or £10.10 per hour. As an International Sportsperson, your pay must be £35,800 yearly.

Ancestry

The Ancestry Visa in the UK is a unique opportunity for Commonwealth citizens who have a British grandparent to live, work, and study in the UK. This visa is particularly appealing as it allows individuals to take advantage of their ancestral connection to the UK and receive a 5-year residency permit.

After this period, applicants can apply for indefinite leave to remain, eventually leading to citizenship if desired. Eligible applicants must be 17 years or older, able to prove their ancestral connection and demonstrate their intention and ability to work in the UK, along with meeting other requirements for maintenance and accommodation.

This pathway provides a significant advantage for those with British heritage interested in exploring life in the UK.

Family

Another option to obtain Indefinite Leave to Remain is if you have family members who settled in the UK, either as a British citizen or a person with indefinite leave to remain.

This includes a partner, a child, an adult dependent relative on a family visa, or a dependent on your parent or partner’s innovator founder visa. There are differing criteria for each visa instance, and you would also go this route if your partner has a valid UK work visa.

Family Visa Required Documents

If you and your partner have a work visa or have already settled in the UK, there are some strict criteria that you must meet for the government to grant you a family visa.

For example, if you are applying based on your partner’s status, you must provide the government with details on any of the following:

•  Your partner is a British or Irish citizen
• They have settled in the UK (have indefinite leave to remain, settled status, or proof of permanent residence).
• They are from the EU, Switzerland, Norway, Iceland, or Liechtenstein and have pre-settled status.
• They have a Turkish businessperson visa or Turkish worker visa

Additionally, you must prove:

• You are in a civil partnership or marriage that is recognized in the UK.
• You have been living together in a relationship for at least two years when you apply.
• You are a fiancé, fiancée, or proposed civil partner and plan to get married or enter into a civil partnership in the UK within six months of your arrival.
• You have been in a relationship for at least two years when you apply but cannot live together; for example, you are working or studying in different places, or your culture doesn’t accept it

You’ll also need to demonstrate that you have a good command of the English language and you can financially support yourself and your dependents without being financially dependent on your partner.

You can stay in the UK for two years and nine months when you get your Family Visa. You can then extend your visa for another two years and six months.

Popular Retirement Locations

When choosing the best place in the UK to retire, personal preferences such as budget, lifestyle, and desired amenities play a significant role. However, certain regions consistently rank high for their quality of life, scenic beauty, and retiree-friendly communities.

The Cotswolds: The Cotswolds is famous for its quaint villages, beautiful hills, and ancient towns. This region offers an ideal retirement location for those who prefer a peaceful lifestyle, love nature, and still want access to high-quality amenities and cultural events.

Dorset: Dorset, known for its stunning coastlines and countryside, offers a slower pace of life and is home to the Jurassic Coast, a UNESCO World Heritage Site that appeals to history and nature enthusiasts alike.

Devon: With its stunning coastline, Dartmoor National Park, and a warmer climate than much of the UK, Devon appeals to retirees seeking a mix of beach and rural life. Towns like Exmouth and Dartmouth are famous for their vibrant communities and natural access.

Suffolk: Suffolk is a picturesque county in the East of England, known for its relaxed pace of life, beautiful landscapes, and charming villages. Places like Aldeburgh and Woodbridge are attractive for their rich cultural offerings, historical sites, and a strong sense of community.

Edinburgh, Scotland: Edinburgh offers the best of both worlds – urban living and natural surroundings. It boasts friendly locals, festivals, and a rich history.

Cost of Living

The comparison of the cost of living in the US and United Kingdom shows some interesting differences in various categories, such as food and housing costs, restaurant prices, and groceries. Overall, the monthly living expenses are generally lower in the UK compared to the US.

Specifically, consumer prices, including rent, are about 16.6% lower in the United Kingdom, and grocery prices are 24.9% lower. However, local purchasing power in the United Kingdom is 22.1% lower, indicating that while some things might be cheaper, the relative retirement income might not stretch as far as it does in the US. As with most things, retiring abroad requires sufficient income.

In terms of taxes, the US and UK have significantly different systems. The US system may be more favorable for high monthly income earners due to lower tax rates and the complexity of state taxes.

On the other hand, the UK (as with other European countries) has a simpler tax system with four income tax bands, but high-income earners may end up paying more tax compared to the US. When it comes to sales tax, the UK has a standard rate of 20% (VAT), which is significantly higher than the varying state sales taxes in the US.

In both countries, property tax (known as council tax in the UK) varies greatly and depends on the specific location and property value. It is difficult to declare a clear winner without considering individual circumstances.

Healthcare is notably more affordable in the United Kingdom. This is because of the publicly funded National Health Service (NHS), which provides most services free at the point of use. In contrast, in the US, private healthcare costs can be high, and insurance is necessary.

Childcare costs are higher in the UK, which may impact families more significantly than in the US.

Healthcare as a Retiree

The UK’s National Health Service (NHS) offers comprehensive healthcare services that are free for UK residents at the point of use. This includes hospital visits, consultations with General Practitioners (GPs), and other healthcare services.

The funding for the NHS comes from taxation, which means that residents are not required to pay directly for most healthcare services.

If you are a US retiree considering moving to the UK, it’s essential to understand how you can access the NHS. Access to the NHS is based on residency rather than citizenship. This means that if you are legally living in the United Kingdom, you would have access to the NHS on the same basis as a UK resident.

Healthcare Surcharge: If you are applying for specific visa categories, you may need to pay a healthcare surcharge as part of the immigration process. This surcharge grants you access to the NHS during the visa’s duration.

Registration with a GP: To use NHS services, you must register with a General Practitioner (GP), the first point of contact for your healthcare needs. GPs can refer you to specialists and hospitals if further treatment is needed.

Prescriptions, Dental Care, and Eye Care: While many NHS services are free, there are charges for prescriptions, dental care, and eye care. However, these costs may be exempted and assisted based on age, income, or specific medical conditions.

Private Health Insurance: Some expatriates choose private health insurance to cover services not included in the NHS or reduce waiting times for certain treatments. However, this is optional and not required for healthcare in the United Kingdom.

Key Takeaways

Retiring in the UK as a US citizen offers a blend of cultural familiarity and new experiences, with no language barrier and a rich historical landscape. The UK’s healthcare system, the NHS, provides comprehensive care, often at a lower cost than in the US, offering financial and health security.

The varied climates and landscapes across the United Kingdom cater to diverse preferences, whether you’re seeking the serene countryside, vibrant cities, or coastal retreats. Additionally, the strong legal system and social services provide a secure environment for retirees.

Frequently Asked Questions on UK Retirement

Do retirees pay UK taxes?

Yes, retirees generally pay taxes when in the United Kingdom on any income earned. However, it is always a good idea to consult a qualified financial advisor to help you with local laws and regulations.

Does the UK have a retirement visa?

A few years ago saw the government tightening visa avenues for those reaching retirement age by scrapping the retirement visa. This doesn’t leave retirees with a lot of options, with the primary ways being family visas or through a business investment. As a result, the changes in visa regulations put a damper on international living for many, who are now looking to other European Union countries to retire.

Can retirees access NHS?

Access to the NHS is based on residency rather than citizenship. So, if you are a US retiree considering moving to the United Kingdom, you are not required to pay directly for most healthcare services if you are legally a resident.