Earlier this year, The Guardian published an article titled “We never got off the treadmill: the Britons who can’t afford to retire.” It highlights how rising costs are making it harder to retire in the UK, forcing many people to keep working long past retirement age. The biggest factors behind this crisis are the housing shortage and the cost of living crisis. With property prices and rents soaring, those who don’t own homes struggle to afford retirement.
According to The Pensions and Lifetime Savings Association (PLSA), the cost of a moderate retirement in the UK increased by over 35 percent in just one year. It now costs £31,300 per year, compared to £23,300 just a year ago. To achieve this level of retirement, you would need a pension pot worth nearly half a million pounds.
Why is it Getting Harder to Retire in the UK?
One of the biggest reasons why it’s so difficult to retire in the UK is that the government keeps shifting the retirement goalpost. Over the past decades, the State Pension Age (SPA) has been steadily increasing:
- Previously, men retired at 65 and women at 60.
- From 2010 to 2020, the SPA for women gradually increased to 65.
- In 2020, the SPA changed to 66 for both men and women.
- By 2026, the SPA is set to increase to 67.
- Plans are already in place to increase it further to 68.
Many experts believe that the SPA could eventually rise to 71 just to keep the system affordable. Imagine planning for retirement at 60, only to find that by the time you reach retirement age, the SPA has increased, forcing you to work even longer.
Women Face Even More Difficulties in UK Retirement
The pension gap between men and women in the UK is another major issue. Women retiring in 2026 at age 67 will receive an average pension of just £69,000, while men will have £205,000 on average. Both figures are far below the £500,000 needed for a comfortable retirement, but women are at a clear disadvantage.
This gap is caused by:
- Career breaks for childcare
- Lower wages on average
- Fewer years of pension contributions
Adding to the problem, women live an average of seven years longer than men, meaning they need more pension funds but actually receive less.
Why Moving Your Pension to India is a Smart Move
If you are an Indian who has worked in the UK, don’t wait until it becomes too expensive to retire. Moving your pension back to India through QROPS lets you enjoy a better quality of life. Instead of struggling with the high costs of UK retirement, you can secure your financial future in India.
QROPS FAQs
How much does it cost to transfer my pension from the UK to India?
Transferring your UK pension to India through an HMRC-approved QROPS is tax-free. You also save on currency exchange fees and avoid additional UK taxation. Keeping your pension in the UK means dealing with regulatory changes, inflation, and potential penalties.
Can I invest my pension in the Indian stock market?
Yes, QROPS investors in India have two main investment options:
- Fixed-Income Instruments – These offer guaranteed returns of up to 10.5 percent, making them ideal for conservative investors.
- Equity Investments through ULIPs – If you prefer higher returns, you can invest in large-cap, flexi-cap, or prime equity funds through ULIPs (Unit Linked Insurance Plans).
Final Thoughts
It’s getting harder to retire in the UK, and the financial burden will only increase. If you’re an NRI with a UK pension, now is the time to move your funds to India. With QROPS, you can avoid penalties, secure higher returns, and retire comfortably.
Feel free to contact us for more details.