It is always reassuring to discover that these ramblings of mine are being read – at least by a couple of people. One of my regular correspondents told me that she had read last month’s article on residency and some of the key points to bear in mind when choosing one country over another. Since my article appeared, the result of a survey of British expats conducted by Lloyds TSB International has been published. It appears that 46% of those questioned cited missing the British countryside as their chief regret about moving abroad – although the same study quotes 68% as saying they are happier abroad.
As my friend is considering her own residency plans at the moment, she asked if I could expand on the topic this time. What she wanted to know was how she could be assured that life would be as she expected if and when she took the plunge and moved country. I misheard her and thought she had said “insured” and off I went on one of my tangential monologues. She stopped me just in time and reminded me she was looking for some overall comfort although she realised an important part was to sort out her various insurance policies.
The conversation got me thinking. Actually insurance of one type or another is one of the vital components in setting up home in a new country, be it here in Gibraltar or elsewhere. But so is that overall comfort level – the “assurance” expatriates seek that overall the right decision is being made. As this is the Gibraltar Magazine’s finance column I thought I should restrict myself to some of the more important financial choices to be made when moving abroad – wherever abroad may be – concentrating on insurance in general and a word on pensions.
There are several types of insurance that should be considered when looking at setting up home in a new country, of which private health cover is without doubt the most important. Now that winter is in full swing and people are coughing and sneezing all around me, health care is the first insurance issue I wanted to consider. This is an increasingly competitive area and several articles have been published recently in the local media on the subject.
But in a prosperous place such as Gibraltar, is private health insurance really needed? After all, we have a health authority that provides good general care based on the UK NHS model and a state of the art hospital at St. Bernard’s. In 2010, my partner needed a few days as an inpatient and we were impressed with both the level of care offered, professionalism of the staff and the facilities available. But as in the UK, publically funded health care has its limitations. For specialist care, waiting lists can be an issue, together with the need when necessary to obtain treatment elsewhere, maybe in nearby Spain or perhaps in the UK. For incoming expats, the position can be even more serious as it is often the case that their terms of employment only allow for emergency treatment. This leaves the individual at risk of not being able to access important, albeit non-emergency, treatment when it may be required.
There are a number of options available on the market that might cover an incoming new resident in their new country. However it is generally true that someone becoming an “expat” is likely to require health cover in other places too. One only need look at our own existence here in Gibraltar. It would be a most badly advised expat resident who did not consider being covered should they happen to cross the border into Spain – or perhaps when they go even further, maybe by driving home to the UK. The sheer common sense of having an international private medical insurance (IPMI) plan becomes self-evident.
The cover available is very wide and will of course need to be considered along with the relevant premium. Issues to consider are not just the overall insured amount but also whether out-patient and chronic conditions are covered together with evacuation and repatriation and so on. As I noted earlier, there has been a spate of articles on this subject locally and not without good reason. In one of them, my colleague Geoff Trew of Sovereign Insurance Services reported that local demand for such IPMI cover is growing. “Gibraltar is attracting increasing numbers of businesses from the UK and the rest of Europe. Their employees expect relocation packages and benefits that include giving them and their families the most comprehensive healthcare insurance protection available in the market,” he said.
But in seeking the same type of assurance you feel in your home country, your car and valuables must also be insured. This is not such a subjective area as health care where one gets to choose the level of cover required. One’s car is either insured or it is not, so price becomes a very important factor. Here in Gibraltar we are well used to the cross border issues – whether one is allowed to drive a “G” registered vehicle, or if one can come into Gibraltar with a Spanish hire car etc. Drive further afield to Portugal or perhaps even Morocco, and choosing the right international insurance becomes that much more important.
Home contents insurance is another area that needs to be considered carefully when moving abroad – particularly if another language is involved. It surprises me how lackadaisical people can be, especially in regard to holiday homes that might be left for weeks or months unattended. Of course there are no such language difficulties here in Gibraltar and home contents are insured in the same way as Britain. But there are some things to think about. Until I moved here nearly eight years ago, I had not come across the use of salt water for flushing. A great idea I thought – until my first leak. Water damage however it is caused creates problems but when the water is salty they escalate. “You’ll soon find out there’s nothing as bad or damaging as salt water” said my plumber cheerily as I looked at the mess and contemplated the bill. Some policies will cover you for damage caused by the water damage but not the costs involved in finding the trouble. Caveat emptor indeed. You might be very happy with the cover but it’s worth reading the small print at the outset so you know in advance what to expect should a claim arise.
Lastly and moving away from insurance but still rather ensuring the security of one’s financial future, the question of pension provision must be considered. Given the reduced value of the euro against the British pound in recent years, expats all over Europe have found their spending power significantly reduced through no fault of their own. In recent weeks, the pound has recovered somewhat but the days of GBP1/€1.60 are probably long gone (although don’t quote me). Moreover, not a day seems to go by without some new scare story about the latest pension scheme closing and so on. As always, the best thing to do is seek professional advice as soon as possible in order to exploit the options available to an expatriate. The English language press in Spain and Portugal are full of adverts and articles relating to QROPS, where someone leaving the UK may transfer their pension into an overseas version offering significant benefits. Less well known are QNUPS which relate to assets that have not received UK tax relief. Again this is another product that offers great potential but the area is complex so seek the right advice every time.
I concluded last months’ article with my normal suggestion that potential émigrés should always get the right advice and be careful etc. I went on to say that the rewards of an expat life can far outweigh the disadvantages – for people with the right mind set. My lady correspondent who started me off on this article is right to be concerned – she needs that assurance – but things won’t be the same as back home and I think that’s part of the attraction. Provided one is aware that areas such as insurance and pensions differ once you’ve gone through passport control, all will be fine. Assurance brings peace of mind and lets you get on with the important bit away from all that finance talk – simply enjoying the new life you have chosen.
