According to the research, contained in what deVere calls its first-ever Returning Expat Profile, 67% of the 263 returning British expats surveyed in the fourth quarter of last year said they came back to a lower annual income than they enjoyed overseas.
However, 78% of those polled via phone interviews, email responses to questions and their face-to-face meetings believed that they were in a “better personal financial position” than when they left, and said they had saved more than their contemporaries who remained in the UK.
DeVere, which claims to be the largest independent advisory firm catering to expatriates, plans to conduct the survey annually, in order to improve its ability to cater for returning expatriates by enabling its advisers to know what to expect from, and better understand, their clients.
Kevin White, head of deVere’s UK financial planning operations, said that in addition to earning less upon their return, “they find that they are paying out more too”, due to the UK taxing its citizens at a higher rate than most popular expat destinations. Many also enjoyed additional expat benefits while abroad, such as employer-sponsored accommodation and education allowances, that they lost when they came back.
“That said, more than three-quarters believe that they have accumulated more savings while they were overseas, compared to their friends, family and colleagues in the UK,” White added.
The research also found that the typical returning British expat takes more than six months to consider his or her investment options.
Three months to settle
“For most expats coming back to the UK, the first three months is usually about moving into their old home or looking to rent or buy a new property, starting with a new employer, and settling their children into a new school,” White noted.
“In this period, the majority of our clients also explore the options of repatriating their money overseas back to the UK…finalise tax payments in the country [from which] they have come, and ensure that emergency tax in the UK is paid before their employer and HM Revenue & Customs arrange their tax code.
“Similarly, all their overseas charges are changed to the UK and all investments are updated with the individual’s new address and contact details.”
From month four onwards, most expatriates report that their UK taxes have all been organised, and if they are going to buy a new property, they gnerally will have the mortgage arranged within the first six months, the deVere research reveals. Sometime around the seven-month mark, White said, most of deVere’s returning expat clients have begun to think about UK pensions, life cover, wills, and UK investment opportunities, such as ISAs.
DeVere, which got its start catering for expatriates, has been expanding its UK operations in recent years, to enable it to better look after returning clients. Last year it expanded its operations in the City of London and opened a second base in the Midlands, and it is planning to open a third UK office later this year.
