Faced with rising taxes and falling living standards, many British workers may be wondering if it is time to pack up their bags and take their career in a more international direction.
Over the past year, the UK has recorded higher levels of inflation than any other economy in the G7, leaving workers across the country experiencing a painful drop in their spending power. Record wage growth of 7.8pc should offer some consolidation.
However, the Government’s decision to freeze income tax bands – and cut the threshold at which the top 45pc rate kicks in – means any pay rise a worker receives is soon eaten up by soaring tax bills.
Labour has ruled out introducing a wealth tax or increasing the top rate of income tax if the party gets into power, Shadow Chancellor Rachel Reeves recently revealed.
But in the unlikely event the party refrains from tinkering with the tax system, the Government’s tax freeze will still leave Britain on track for the highest tax burden since the Second World War.
Many workers have had enough. An estimated 557,000 Britons emigrated last year, according to the Office for National Statistics, and higher earners and entrepreneurs are among those jumping ship. This year, consultancy Henley & Partners forecasts that 3,200 millionaires will abandon the UK – double the number seen in 2022.
But working out where to relocate can be a challenge. Beyond salary, it is important to factor in the cost and quality of living, as well as how much tax you are likely to pay on income earned.
Here, we outline the best countries to move to for a higher disposable income.
The UAE has become a popular destination for Britons looking to keep more of what they earn
Credit: iStockphoto
Dubai of the United Arab Emirates (UAE) is an increasingly popular destination among British expats. Living there is expensive, and workers will need to pay for medical insurance, but with no income tax, they can keep more of what they earn.
Among the UAE’s biggest industries are oil and gas, real estate and hospitality. Bob Parker of Holborn Assets, a financial advice firm, said: “Saudi Arabia is a next door neighbour and is about to become the next big thing – Neom is attracting world attention and thousands of key workers who currently prefer to have their families in Dubai.”
The majority of expats are found in Dubai, he added, however many are also found in Abu Dhabi “and the lesser known but fast-growing Emirate of Ras Al Khaimah, an hour’s drive from Dubai and with much cheaper housing”.
There is no tax on income in the United Arab Emirates.
The average apartment price per square foot is 1,294 dirhams (£282) according to property consultancy CBRE.
Emirati nationals can access public healthcare for free, but British expats must pay. Both nationals and expats are required by law to have health insurance. You may also want to pay for a health card, which costs 320 dirhams (£70) for an adult.
A monthly Metro pass in Dubai is likely to cost about 350 dirhams (£76).
To work and live in the UAE, you need a residence visa.
If you are employed by a company based in the UAE, then they can apply for a standard residence visa on your behalf, usually valid for two years.
However, getting a company to sponsor you is not the only way to move to the UAE.
The country also offers green visas to “skilled workers” with a bachelor’s degree and an employment contract, investors, and freelancers – also with a bachelor’s degree – provided they have earned more than 360,000 AED (£77,629) annually over the past two years.
Mr Armoils said: “The UAE is relatively easy to migrate to, especially for wealthy people that buy a property there.”
This is because “golden visas” are available to investors who buy a property worth more than two million AED (£431,485), as well as:
- Entrepreneurs who own a business with an annual revenue of AED one million or more
- “Outstanding” students from top universities
- Doctors
- Scientists
- Inventors
- Executives
- Specialists in scientific fields
- Athletes
- Doctoral degree holders
- Specialists in the fields of engineering and science
- Nurses, medical assistants, lab technicians and pharmacologists who worked on the frontline of the pandemic
Once you have your own residence visa, you can sponsor family members to come and join you.
Switzerland is widely considered the most expensive country in Europe
Credit: Allan Baxter
Salaries in Switzerland are the highest in Europe and among the highest in the world, making it a top destination for migrants looking to bump up their paycheque.
Major companies based in Switzerland are Nestlé, Zurich Insurance Group and Glencore.
Working out your rate of income tax in Switzerland is complicated. The maximum overall rate of federal income tax is fairly low, at 11.5pc. However, each of the 26 cantons also has a separate law for cantonal taxes.
Switzerland is widely considered the most expensive country in Europe.
The median monthly rent for apartments in Switzerland is CHF 1,580 (just over £1,400), according to the platform RealAdvisor. In Zurich it may be more common to spend over CHF 2,000 (£1,800).
However, based on an average salary of CHF 72,993 (£65,500), this would still leave someone with a decent amount of disposable income.
You should also expect to pay around CHF 400 (£360) a month on health insurance, which is compulsory in Switzerland.
Depending on how many zones you travel within, an annual public transport pass in Zurich could cost between CHF 460 (£412) and CHF 2,226 (£2,000).
You will need a company to sponsor you in order to work in Switzerland. Generally, the State Secretariat for Migration (SEM) will only give authorisation if you are a manager, specialist or otherwise skilled worker.
If you want to be self-employed in Switzerland, then you will need to show that your self-employment “will have a lasting positive effect on the Swiss labour market”.
To do this, you will need to submit a range of documents including a business plan, planned investment, projected turnover and profit.
Australia has the world’s highest minimum wage, and set salary requirements for expats
Credit: Andrew Merry
Australia is expected to attract the highest number of millionaires from other countries this year, according to Henley & Partners.
Among those heading for Australia’s sandy beaches are British doctors. An anaesthetist working as a consultant for the NHS and earning £115,000 could double their salary in pounds by moving down under.
Australia has the world’s highest minimum wage, and set salary requirements for expats.
If you reside in Australia for more than half of the year and you intend to stay in the country, then you will be considered a resident for tax purposes.
Whereas the income tax rates for non-residents range from 32.5pc to 45pc, for residents the range is between 0pc and 45pc.
Average rental costs in Sydney are currently $670 (£340) a week, according to data from Domain – making the capital significantly more expensive than Australia’s other biggest cities, such as Melbourne and Brisbane, where average weekly rents are $500 (£250) and $530 (£270).
Living in either of these cities on an average salary of $59,408 (£30,500), you might expect about half of your monthly take-home pay to go on rent.
Australia’s healthcare system is a blend of public and private. Its public health system, known as Medicare provides essential hospital treatment, doctors appointments, and medicine for free or for a reduced cost.
The UK has a Reciprocal Healthcare Agreement with Australia, so while in the country, Brits can access emergency healthcare for free.
However, additional services such as dentistry, ophthalmology and physiotherapy are part of the private system.
Cost for health cover varies depending on your age, and the level of care you want to pay for. For just hospital treatment, a person can expect to pay $2,257 (£1,160) for those under 36, $2,713 (£1,390) for people between 36 to 59, and $3,076 (£1,580) for those aged 60 and over, according to financial comparison site Canstar.
For combined hospital and extras, it’s $3,017 (£1,550) for those under 36, $3,456 (£1,770) for those between 36 to 59, and $3,829 (£1,970) for those aged 60 and over.
You could choose to get just insurance for “extras” – at a cost of $877 (£450) for lower level of coverage, $1,046 (£537) for mid level coverage, and $1,157 (£595) for higher level of coverage – given Medicare covers emergency treatment.
The Employer Nomination Scheme visa lets companies nominate workers to stay in Australia permanently. To be eligible, your job must be on the relevant list of eligible skilled occupations, which includes accountants, engineers and doctors.
“People that move to Australia generally need to fill some kind of critical skills shortage,” said Mr Amoils. “Migrants to Australia also need to show they financially support themselves.”
You can also get a temporary visa for up to four years if you are filling a role that the company is struggling to hire for.
Graduates in the US can expect a starting salary of $58,862 – or £49,526
Credit: Diane Bentley Raymond
You can earn significantly more working in the US compared to the UK. Graduates in the UK can expect a starting salary of £30,921, according to the Institute of Student Employers, compared to $58,862 – or £49,526 – in the US.
The top places in the US attracting expats are the San Francisco Bay Area, for tech, and New York City for finance roles. Andrew Argoils of Henley & Partners said: “Commuter towns near NYC such as Greenwich, Darien and Old Westbury also have very high average incomes.”
The trade-off is that living in New York or San Francisco will be far more expensive than living in a less populous, more obscure area.
The US has seven federal income tax brackets, with rates of 10pc, 12pc, 22pc, 24pc, 32pc, 35pc and 37pc. The top rate applies to income of over $500,000 (£400,860).
On top of this, US states apply their own income taxes. Living in New York for instance, will add a further 9pc to your income tax rate.
Rent in the US varies dramatically across the country. Average monthly rent in Manhattan stood at $5,588 (£4,500) in July, according to Miller Samuel and Douglas Elliman. You might want to consider moving to an outer borough like Queens or The Bronx for cheaper rent.
You can buy a MetroCard for $132 (£105) a month to ride the subway and buses as often as you like.
You’ll also need to factor in health insurance costs. According to the Kaiser Family Foundation, a non-profit, the average annual premium for family coverage was over $22,000 (£17,600) in 2022 and almost $8,000 (£6,400) for an individual.
Most Americans get health insurance through an employer, which will cover some of this cost. For family coverage, a worker will typically contribute $6,106 (£4,900), or about $509 (£400) per month, while the average worker contribution for a single policy is $1,327 (£1,060). This means about $110 (£90) and $509 (£410) dollars a month may need to be spent on health insurance.
You will generally need to be sponsored by a US employer before you can apply for an immigrant visa.
To become a permanent resident, you will need a Green Card, typically only available to highly skilled workers, unless you have a close relative in the US.
While your estate agent will most likely be in charge of scheduling and managing viewings there are ways you can ensure the first impression potential buyers have of your property is a positive one.
If the weather allows it, keep the windows open and turn the lights on so the property feels airy and fresh for viewings.
Do not be afraid to share your experiences of living in the area. If there are elements buyers can relate to or look forward to it may improve their perception of the property.
It may also be worthwhile finding out any additional details on the viewers from your estate agent before they arrive. For example, do they have children and if so can you recommend local schools or playgroups?
Chris Husson-Martin, director and head of sales at Hamptons in Salisbury, says: “The best advice we can give is to take a step back and think about their own home with fresh eyes.
“Kerb appeal is very important, we encourage sellers to present the front of their home well, tidying up front gardens and the approach to the house is essential as this will be the first thing a viewer will see.
“The majority of buying decisions are made within the first few minutes, or even seconds of a viewing.”
In the current climate, buyers may be keen to put in an offer as soon as possible in order to help facilitate the sale of their own home, or not lose out on a more beneficial mortgage rate.
However, it is important not to feel pressured into accepting an offer straight away. Ultimately the process is a negotiation and if you have more viewings lined up, your home may even be the subject of a beneficial bidding war.
Sophie Archidiacono, head of sales at Hamptons Balham, says: “The more information we can share with a seller, the better we can help them to make a decision.
“I would always advise a seller to pick the buyer that suits their requirements best. Some sellers value matching timelines over an extra £5,000 on the offer, whereas some want a buyer in the most secure financial situation possible.”
Sellers may also be concerned about “gazundering”, where a buyer lowers their offer just before contracts are exchanged, essentially trapping the seller into accepting.
Ms Archidiacono advises sellers to be wary of buyers who are reluctant to disclose financial information.
Meeting the buyers face to face, will hopefully build a relationship between the parties and help you gauge mutual commitment.
Other tricks include installing temporary wallpapers or artificial plants and flowers, as well as reorientating existing furniture to open up space.
Stagers, including London-based Sophia Cramer who runs company Inner Pieces, spend much of their time trawling vintage shops and flea markets for good pieces, which they store in large warehouses until needed.
How does it work?
Stagers will typically do an initial consultation with the seller or property developer that has employed them, before giving a quote for the decorative work planned.
The furniture provided by the stager is rented but other work, including new carpeting, tiling or painting, is usually paid for upfront by the client.
Once the soft furnishings and sofas are in place, viewings can begin (or restart) with the house looking its best.
Much of the appeal of staging is seen on social media, where estate agents market properties that have been carefully decorated to their followers in the hopes of tempting potential buyers.
What does it cost?
Paloma Harrington, founder of the UK’s Home Staging Association, says an initial consultation can cost between £100 and £350 an hour, with the largest properties taking up to three hours.
Once the decoration has been agreed, furniture is typically rented for between eight and 12 weeks, depending on how quickly the agents believe the house will sell.
A three-bed house in London can cost between £20,000 and £85,000 to stage for 12 weeks, after which the rented furniture can typically be renewed on a monthly basis at a slightly discounted rate.
Outside of London, prices are lower but houses are often larger, taking up more of the stager’s inventory of soft furnishings.
It is possible to fund the cost of the renovation or decoration using the potential proceeds from a sale.
Property platform Flyp takes on the costs of making a home look beautiful in exchange for a percentage of the additional sale profit, with their cut depending on how much they invest in the house.
The property investment company typically spends between £5,000 and £50,000 on staging, although may invest as much as £100,000 in homes that need improvement, and is currently taking on around 30 projects each month.
The company will then take a cut of up to 50pc of the additional profit created by the renovations, depending on how much it invested in the property.
Now read: How to choose an estate agent to sell your house (and how much you should pay)
Is it worth it?
The Home Staging Association says the average time non-staged properties stay on the market is 99 days – compared to 41 days for decorated homes.
Property developers in the trade body’s 2022 report suggested that staging improved the offers on homes by up to 6pc.
This adds up to £2,152 per night, which is more than some nurses in lower pay bands receive.
Nurses’ pay starts at £22,383, or £1,865.25 per month. But the average salary for a nurse following their 5pc pay rise is somewhere between £33,000 and £35,000 – up to £2,916 a month, according to Nurses.co.uk.
Top 2pc
Health Secretary Steve Barclay says striking hospital consultants, who have two further walkouts planned next month, rank in the top 2pc of UK earners.
Meanwhile, 7.6 million people are on NHS waiting lists – a rise of more than 400,000 since Rishi Sunak pledged to cut waits.
Patients can expect to face significant disruption over the next two days due to the latest walkouts, according to NHS bosses.
While emergency care will be provided by consultants, most routine care has been put on pause.
Last year, half of consultants said they were satisfied with their pay – with just 30pc saying they were dissatisfied, according to an independent report by the Office of Manpower Economics.
As of this year, a consultant can earn a basic pay of anywhere between £93,666 and £126,281 – up from last year’s pay bands of £88,364 to £119,133.
With average full-time NHS earnings – which include on-call responsibilities, medical awards and geographical allowances – consultants earn more like £143,100 annually.
UK consultant pay beats New Zealand’s
Consultants in England also earn more than their counterparts working in New Zealand, Denmark, Spain, France, Italy and Portugal.
England is ranked sixth out of 28 countries on consultant pay, according to independent health think tank Nuffield Trust.
The Netherlands, Ireland and Germany all sit above England.
“Through shared ownership, you might only need to put down £6,000 as a deposit for 25pc of a one-bedroom flat, rather than something like £25,000. It gives people financial freedom, and gives security to people who desperately want to put down roots, maybe get pets or start a family,” she adds.
The scheme is most popular in London and the South East, where house prices have left even those comfortably off unable to buy a house with a normal mortgage. To be eligible to buy a shared ownership property, Britons need only be over 18, and earning less than £80,000 a year (or £90,000 in London).
However, shared owners must also pay rent to a housing association on the section of the property that they do not yet own. That rent is often attached to inflation, meaning that it can go up over time, alongside the cost of mortgage repayments.
Then, there is the fact that shared owners are responsible for 100pc of the maintenance costs on their property, despite only owning part of it.
On top of that, lease lengths have given some shared owners a nasty shock when it comes to selling their properties on. Shared ownership properties can plummet in value when there are less than 80 years left on a lease.
Since 2021, shared ownership properties have been offered on leases of 990 years, rather than 99 years or 125 years, but the new rules have done little to protect the investments of those who bought beforehand.
The fact that only part of the property is for sale can make it difficult to find buyers, too, despite growing demand for shared ownership housing.
A shared owner herself, Phillips says the advertising and promoting of shared ownership as a route to owning your own home is not transparent enough.
“There is a lot of buck-passing between housing associations and solicitors when it comes to making sure that those considering shared ownership have the information they need to make an informed purchase decision.
“The scheme is government-backed, and it’s marketed as social, affordable housing, and yet there’s very much a ‘buyer beware’ attitude if problems arise post-purchase,” she adds.
“As always tax should be considered, if the funds are not sheltered correctly much of the return can be lost.
“We would always recommend taking advice when investing surplus funds to make sure the investment strategy is directly aligned to your objectives,” said Mr Cook.
Now read: Tax calculator: how much you will pay on savings (and easy ways to cut it)
Should I use the cash to help family members and avoid inheritance tax?
Another option for your funds once you downsize is to use the cash to help younger family members.
This can be through a cash lump sum as a gift, which may help minimise inheritance tax further down the line. If you go down this route you need to be aware of the annual gifting limit to make sure you are not caught out.
Each tax year you can give up to £3,000 individually or £6,000 as a couple, free of inheritance tax. You can give more, but there may be IHT to pay if you die within seven years of giving the gift.
You can carry any unused annual exemption forward to the next tax year – but only for one tax year. For example, if you and your partner did not use your gifting allowance in the previous tax year, you could gift as much as £12,000 between this tax year from the property proceeds and can then gift a further £6,000 from April 6.
Alternatively, if you are thinking of starting a savings pot for them to use later on, such as on as a deposit for a home, a Junior Isa may be a better way to go.
Junior Isas have a £9,000 annual allowance, but it cannot be carried over. Anyone can pay into these accounts, not just those with parental responsibility. This means that grandparents can contribute, as long as the total stays under the allowance.
What is downsizing tax relief?
One small carve out in the inheritance tax rules relates to passing on property.
If you leave the home to another person in your will, it counts towards the value of the estate, but you increase your nil band rate by £175,000 – reducing the taxable portion of the inheritance.
There may be a concern that by downsizing your property your beneficiaries will lose more to inheritance tax by missing out on the nil increase.
However, most families don’t realise that by using “downsizing relief” the value of a previously owned home can be used to offset IHT. The catch is that the total value of your estate cannot be more than £2.7m.
Now read: The little-used ‘downsizing loophole’ that cuts inheritance tax
Other things to consider when downsizing
Stamp duty
As with any house move, downsizing incurs other costs. Stamp duty will need to be paid on the property you are buying if it is worth over £250,000, and more if you own more than one property.
Buyers who own another residential property will be charged an additional 3pc on top of their base stamp duty rate. However, you do not pay the additional rate if the house you are buying is replacing your main residence that has already been sold.
The upper end of the market includes homes with a view of or, better still, direct access to the water. Irwin estimates that a pretty view will add around 20pc to 25pc to the value of a property, while those that front on to the water sell at a premium of 75pc to 100pc relative to similar properties a little way inland.
Historically the best performing towns and villages have been those with straightforward routes to the M6, making them an easy choice for buyers coming from Manchester, Liverpool, Preston and Lancaster.
Since the pandemic Irwin has noticed an increasing focus on villages on the southern fringes of the Lake District, in the area around Cartmel. They have grown in popularity thanks to their proximity to commuter stations at Ulverston and Cark, useful for hybrid workers who still need to be in the office now and again.
“We saw an awful lot of young, professional families, in their late 30s and upwards, moving here, especially to the larger houses with space for home offices,” says Irwin. “They were moving out of maisonette apartments and terraces in London and up here they were looking at detached houses with an acre or so of grounds.
“A lot of people jumped on the bandwagon, and although there are fewer of them now they are still coming.”
Now read: Mortgage crisis: how much more you will pay as rates remain high
‘Our dogs are living their best lives, and so are we’
Two years ago Amanda and Mark Sarjant were living in a converted barn in a village near Shrewsbury in Shropshire. Mr Sarjant was working as a finance director while his wife was a chartered accountant.
The couple, who have four children, both nurtured dreams of changing their life. Mrs Sarjant, 53, had retrained as a nutritionist and wanted to give up spreadsheets and audits for good. Her husband, 56 and a keen climber and walker, simply wanted to live in the Lake District, a placed he had loved for years.
Shortly before the pandemic the couple started to look for properties in the Lakes but hadn’t found anything to fit the bill. When Covid struck, the property market closed down and they put their plans on hold.
“The estate agent was still sending us details, but we weren’t really looking at them,” says Mrs Sarjant. “Then Mark got an email and opened it – perhaps he was bored at work – and it was Haven Cottage.”
Choosing accommodation is one of the first major decisions students will have to contend with.
However, with rents soaring across the country, and student loans providing a paltry income to most, accommodation providers are fairly likely to require prospective tenants to find a guarantor.
A guarantor agreement that goes alongside a lease, protects the income of the landlord in the event that difficulties arise.
This role is often filled by a student’s parent or guardian, although it does not have to be.
But, if your child is going to university and you are expected to sign an agreement, it is important that you know what you are agreeing to.
Telegraph Money has taken a look at what it means to be a guarantor, who can be one and the things you should consider when signing up.
What is a guarantor?
A guarantor is someone who commits to paying rent if the student tenant can no longer make the payments.
It is common practice in the private rented sector for landlords to require a guarantor so that they are protected from losing income if their tenant gets into difficulties – not always restricted to the student sector.
A guarantor may also be asked to cover costs for any damage to the property during the tenancy.
Student tenancies are no different to regular private-sector agreements, with the same liabilities falling to the guarantor if the renter breaks the terms.
Now read: How much it costs to send your children to Britain’s top university cities
Who can be a guarantor?
Parents are commonly used as guarantors by students, but it doesn’t necessarily have to be a close relation or guardian.
Guarantors must be over 18, although some may need to be older, and will usually be required to have a good credit history and enough savings or income to cover the payments if needed.
Some landlords or agents may require a certain salary or wealth level in order to qualify, according to Experian, but this is not the same in every case.
Unite Students, one of the UK’s largest student accommodation providers, requires guarantors to be over 25.
Often they will need to be UK resident so landlords know they can reach them easily if there are issues. For international students or others who may be without a suitable person in the UK some universities offer guarantor schemes to fill the role.
Now read: How parents can cut their child’s university costs (without paying for everything)
What does a guarantor need to provide?
As a guarantor you will have to step in and pay for the accommodation if the student is unable to. Because of this you will need to provide evidence that you have sufficient funds to do so.
Most landlords or property management companies will require you to provide proof of ID, address and financial details such as bank statements or payslips.
My best ever property deal (and the mistakes followed)
Here, the key is to gather as much information as possible about the property. Don’t be afraid to ask questions, although there are always elements you won’t discover until you start pulling things apart. Of course you need the views of builders, surveyors and maybe architects, but go further afield. Ask your neighbours about the issues they have experienced with their properties and what they wish they had known when they moved into the area.
If the road is made up of terraced or similar properties it is likely they will be affected by the same problems. A house I owned in Wandsworth was situated on a road with a slight decline that we later discovered used to have a river at the end, causing problems for the properties nearby. This isn’t something an estate agent is going to tell you. Ask around.
But over the thousands of properties I have helped view, buy, sell or renovate, the mistake I see the most often is when buyers choose properties based on the life they are currently living rather than the lifestyle they may like to have in years to come. Take a couple of young professionals buying their first home. They may choose somewhere with an easy commute, close to their friends and favourite local pub.
But those things can be quite temporary, whereas choosing a house needs to be as long term a decision as possible. My advice, and I know it’s not easy, is to try to think five years ahead when you’re buying property.
It may seem outlandish to buy a three-bedroom house close to good schools when there’s just two of you, but it’ll save you more than just stamp duty if you don’t have to move again as your family grows. And while it may be painful to pay a premium to be in a family-friendly area, these properties usually hold their value. It is unlikely to be a sunk investment even if your plans change.
Further down the line, buying your forever home with space for maybe your parents to move in, or for older children to return home to after university might not be something you are thinking about now, but it will give you more options later on.
However, another common mistake is to constantly think about the value of your property rather than what will increase your enjoyment of living there. I’ve done this myself. At one point I was digging a basement in a property, paying rent on one house, a mortgage on another bigger family home.
I had it all worked out but when the 2008 property crash started my business dried up; suddenly I was ploughing money into a property that was dropping in value by the day. Everything was moving in the wrong direction, I was terrified. I knew it was the right work for the right property, but I couldn’t see past the finances.
My advice here is to remember that unless you are looking to sell, the value of your house at a particular point in time isn’t important. We all know how quickly this market moves, as long as you can sit out a dip and it is the right home for you then, while it doesn’t feel nice, it doesn’t necessarily matter.
Source link