Don't be shy about retiring

More and more pensioners are investing in homes abroad. Graham Norwood reports

Retirement no longer means having to settle for uncertain British summers and a small flat in the West Country. The Government says 871,000 Britons now draw their state pension while living permanently overseas - and perhaps as many again have retired abroad and are either below pensionable age or choose not to take a pension at all.

Developers are now pitching homes at this growing market, with no better example than the new Santa Pola Life Resort on Spain'sCosta Blanca, the most popular non-English-speaking location for British retirees.

Santa Pola is a 450-home version of the retirement communities for 55-plus residents now spreading across the UK. It looks like a Mediterranean village of bungalows and flats and is 12 kilometres from Alicante and seven from its airport, which has budget flights to and from more than a dozen UK destinations.

This scheme, however, offers its own shopping centre, a 24-hour reception and security services, bus shuttles to the beach, buggies to move around the resort, a spa centre, gym and swimming pool, and close proximity to two golf courses.

On site there are also consulting rooms, physiotherapy and psychology services, chronic illness assistance and first aid facilities.

Properties range from 600 to 1,000 sq ft and prices go from €130,000 (£90,000) to €220,000 in phase one of the scheme, which will be completed next year.

Vitalis Park is a similar resort with 150 units at similar costs at Rincon de la Victoria near Malaga, while there are a dozen more retirement resorts from Barcelona to Spain's southern tip, with more planned.

There is a large choice of how to fund your retirement purchase in locations such as Spain.

KEI Homes, a web-based retirement property service specialising in southern Spanish resorts, is typical of many estate agents in offering these options:

Freehold - traditional ownership, UK-style, where you live in the property and/or rent it and enjoy capital appreciation when you sell, though you must ensure it is bought by over-55s;

Life-lease - a lump sum, often 40 per cent of its market value, is paid up front. You may then have to top up this payment with an occasional rental payment, but there may be restrictions on what if any capital appreciation you enjoy, and also on your ability to sell your lease;

Share option - this allows you, with family and friends, to buy shares in the property and use it on a rotary time-share system;

Flexi-plan - a part-ownership scheme with a housing association or private company. You usually get a proportional share of the profit, or loss, when you sell.

Another factor is the service charge that goes with owning a property in a well-serviced community.

In Vitalis Park a monthly fee of €2.50 is levied for every square metre of your property plus €150 for each resident. At Santa Pola the monthly charge is likely to be lower but still up to €200 per property. Then there are the transaction charges - 10per cent of the purchase price in Spain's case.

But in many locations you can rent out your property if you do not use it year-round (although only 55-plus tenants would likely be allowed) and some resort management schemes such as those at Santa Pola will maintain your home when it is rented out.

In Spain, and most countries popular with older Britons, there are English-speaking communities in popular areas, with good health services which cater for ex-pat residents.

If you are brave enough to start a new life abroad just as most of your peers head for the British coast, the world is your oyster.

Life Resort Santa Pola, www.santapolaliferesort.com, 0034 966 69 85 06; Vitalis Park, Costa del Sol, www.vitalispark.com, 0034 952 970 207; KEI Retirement, www.kei-retirement.co.uk, 0034 966 795 229.