Move abroad to beat the recession blues
Times are tough, so is it worth emigrating? Kate Hughes looks at possible exit strategies
Saturday 21 February 2009
The interest on your savings is minuscule, your pension pot has been hammered, and the value of your house is plunging. You might be made redundant – and, to cap it all, we’ve had the coldest winter in 30 years. In short, life in Britain isn’t looking great. This may be a worldwide wipeout, too, but there could be a few safer, if not entirely safe, havens to run to with what’s left of your wealth.
“Very few places have not been affected by the downturn,” says Oliver Watson, regional managing director of international recruitment consultant Michael Page. “But if you are looking for an overseas opportunity, look for a sound gross domestic product [GDP, a country’s input and output] and an economy linked to natural resources. Brazil won’t see stellar growth over the next year, but it should be steady. It has an immature and developing market and isn’t exposed to the kind of debts that developed Western countries have suffered from.”
So far, Brazil has weathered the downturn better than most, but low demand for its exportable products means that the South American country will not escape unscathed. The most up-to-date GDP figures show continued strong growth, but they only go to the end of September last year, and business confidence in Brazil is at a six-year low. Brazil’s economy is taking a hit, but the downturn here may be less severe.
This economy has always been fairly steady, neither booming nor busting. “New Zealand has not escaped the effects of the credit crisis, but it has been hit less hard than many European and North American nations,” says Mark Bodega of the currency trader HiFX. com. “And the newly elected National Party’s concentration on the economy is expected to keep it on a even keel.” Research from Statistics New Zealand puts the unemployment rate at 4.2 per cent, with only 94,000 unemployed, up just 0.3 percentage points in three months. UK unemployment was 6.3 per cent for the quarter to December 2008, up 0.4 percentage points over the previous quarter.
But the economic position has brought a change in “immigration focus” from filling skill-shortage positions to protection of jobs for New Zealanders. That could mean that immigrants bringing in plenty of ready cash may be more likely to be granted residency.
China & Malaysia
A tough one. Developing markets weren’t able to “decouple” from Western economies before the downturn, and Asia has certainly been affected. But advocates of the area, such as regional fund managers, note that countries on this side of the world tend to have well-capitalised banks that fund lending the old-fashioned way, via deposits. Government debt levels in China are low, at just 17 per cent of GDP, and despite the recent fall in exports, high savings rates mean the country, and others in the region, have healthy cash surpluses.
Malaysia seems to have learnt lessons from the Asian financial crisis in the 1990s. The country reported a 16 per cent surplus in GDP and international reserves of $107bn, four times the nation’s external debt, towards the end of last year.
“Asia faces some of the toughest conditions since the late 1990s regional crisis,” admits Andrew Beal, fund manager at Henderson Pacific Investment Trust. “However, it is likely to emerge from the recession in much better shape than many Western nations. The region’s famously robust savings ratios mean there are none of the problems with personal indebtedness and property market bubbles that have dragged down Western nations.”
Abu Dhabi & Qatar
Having observed Dubai’s unprecedented rise with interest, as well as the effect the global downturn has had on the city, Abu Dhabi seems to be coming into its own. “Confidence among those people living in Dubai has been dented, but sentiment in Abu Dhabi is very different,” says Nick Tolchard of the International Development Division at Invesco Perpetual. “There is a deeper pool of financial resources here, and it has significant oil reserves. A large number of people and companies are moving here. A lot of strategic, long-term investment is going on.” And, he adds, Abu Dhabi’s strength will help bolster Dubai’s return to growth within around 14 months.
Over the border in Qatar, it’s a similar story. This is one of the richest nations in the world, with extensive natural gas. “Qatar doesn’t feel immune from the global downturn any more than the rest of the region, but as the country sits on such strong reserves, its growth should continue almost as planned,” Tolchard notes.
Where not to go
Some of the hardest-hit countries are those many of us decided to escape to in the past. Spain is an infamous example. By April 2008, the credit crisis began to kick in and the Spanish property bubble burst. The days of strong growth are over, and unemployment has soared to about 14 per cent. Property may be cheap now, but getting a job is tough.
What about the nations further away? “Australia’s resources-based economy has struggled since mid-2008,” Bodega says. “The government has halved its economic growth forecast for 2008/09 to 1 per cent, and the central bank cut interest rates to 3.25 per cent, the lowest in 45 years. The decline has been blamed on the global financial crisis and economic slowdown, and the rate at which visas are granted seems to be slowing.”
And what of Dubai? Tolchard says: “The myth that Dubai was somehow decoupled from the global financial crisis vanished in the final weeks of 2008. The region has been hit by firms retrenching back to their domestic markets.” There are new redundancies daily, and residential property values have dropped 50 per cent in a year. The weather may be far better than the UK, but this is not the best option for imminent relocation.
The UK Foreign and Commonwealth Office offers impartial information about the stability and security of countries; see www.fco.gov.uk/en/travel ling-and-living-overseas
Thank you and goodbye: How to make the move
It’s all about planning. Try to begin tying up your financial affairs as early as possible. This will ensure that you incur as few penalties as possible on any longer-term savings or investment plans you want to liquidate for ready cash. The pound is at a stomach-churning low against critical currencies, so if you think the rate will improve before you go then put larger lumps of cash in an easy-access savings account in the meantime. If you think you’ll be regularly transferring smaller amounts in different currencies, a specialist account such as a local euro-denominated current account or a British-based euro account will help reduce transfer and exchange costs, particularly if you expect to have money or income in two currencies. (Now is also the time to think about how permanent this move is – if you wish to leave funds in the UK then you may need to hand over the power to manage your UK-based money to a family member or close friend.)
Also take time to research the financial advantages you can take with you. If you are working for a UK-registered company within the European Economic Area, for example, you are entitled to both maternity and sick pay as long as your employer is paying National Insurance on your behalf. Over a million pensioners receive their pensions overseas, but if you have already retired when you emigrate it will have to be paid into a UK bank account. And you could even continue to claim benefits such as winter fuel allowances.
Also consider the cost of visas. You may have to pay for private healthcare and schooling once you arrive, and don’t forget the cost of the flights and shipping.
Rain doesn't stop profits at Andy Murray's £600-a-night hotel Cromlix House
Tips on tipping: How and when should you give extra money for good service?
Think twice about investing in fine wine - it's a vintage ploy for the fraudsters
Five Questions On: GB Energy's new tariff
Bank-beating exchange rates on your international payments
- 2 Edward Heath 'child sex abuse' allegation: Investigation to be held into Wiltshire police handling of alleged claim in the 1990s
- 3 Dutch King Willem-Alexander declares the end of the welfare state
- 4 A-level results 2015: UK exam board OCR admits it 'estimates' hundreds of pupils' grades after papers 'go missing'
- 5 Giant Minion terrorises drivers in Ireland as 40ft inflatable blocks busy Dublin road
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Chris Leslie: Jeremy Corbyn's anti-austerity agenda will harm the poor, says Labour shadow Chancellor
Landlords renting properties to illegal immigrants to face up to five years in prison
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Calais crisis: The seven claims made about the migrants - and the reality
iJobs Money & Business
£20000 - £25000 per annum + OTE £45K: SThree: SThree Group have been well esta...
£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
Up to 70k DOE: Guru Careers: We are seeking an experienced Financial Director ...
£11000 - £50000 per annum: Recruitment Genius: This financial company offer ma...
Day In a Page
Set sail for this four-bedroom farmhouse in Cowes. With five acres of land and an indoor pool, this home oozes character. There is even potential to let a one-bedroom annexe.
With five bedrooms, this spacious home offers beautiful gardens and modern interiors - set within the popular market town of Bingley.
A few miles from the seaside at Perranporth, this four-bedroom farmhouse sits amongst nine acres of idyllic grounds - including a lake and two barns used as holiday lets.
In the pretty market town of Bungay, this grade II-listed Mill House is arranged over four floors, offering four bedrooms and three reception areas.
This first-floor flat comes with two bedrooms, an impressive open-plan reception room and two lovely roof terraces.
This five-bedroom home comes with a range of outbuildings including a large barn which could be converted into a self-contained granny-flat or rental.
Moored at Taggs Island and reached via a pretty garden, this two-bedroom houseboat has a vaulted reception room and skylit garden studio - currently a beauty salon.
On the edge of the city, this six-bedroom home comes with an outdoor swimming pool and a large garage block that has annexe potential.
A contemporary house spread over three storeys, this three-bedroom detached home has large sliding doors that open out to the River Quaggy.
Moored in Chelsea's Cheyne Walk, this houseboat offers two double bedrooms and a teak deck that's ideal for al-fresco dining.
This former village bakery, dating back to the 17th century, is now a three-bedroom detached home just a few miles from the East Sussex coast.
On the picturesque Isle of Man, this four-bedroom character home has a ground-floor shop that's currently run as a newsagents and a flat that would make an ideal holiday let.
In a new collection of flats, this first-floor two-bedroom apartment offers ample entertaining space and a prime view of Furze Green from a private balcony.
This three-bedroom stone-built cottage currently trades as the village store with a restaurant in the annexe and family accommodation on the upper floors.
Previously two semi-detached properties, this five-bedroom home is spread over three floors with a large breakfast kitchen, orangery, office and gym on the second floor.
This five-bedroom home enjoys countryside views over the Blyth estuary to Southwold, offering flexible living space with a ground-floor annexe - ideal for use as a holiday let.
Close to the market town of Eye, this four-bedroom detached home offers a double-height living room which takes the place of the original, 19th-century, chapel nave.
Dating back to the 19th century, this four-bedroom home needs modernising. Spanning three storeys, the red-brick house has a fireplace, a small terrace and a cellar.
Just outside of Cambridge, this single-storey home offers three double bedrooms, a living room with vaulted timber ceiling and ladder steps that lead to a mezzanine study area.
This six-bedroom Georgian home is on three floors with open fireplaces, a two oven Aga, an annexe, and cottage gardens with outbuildings and a car barn.
A former coach house, Glebe Farm Stable is now a three-bedroom cottage with a double car barn, an attached office, kennels and an outbuilding that's currently used as a gym.
Located beside an impressive Victorian viaduct, this four-bedroom home has an open-plan living area that is glazed on two sides, with skylights and high ceilings.
A former furniture workshop, this three-bedroom home has high ceilings and painted brick walls, in a village setting only fifteen miles from the coast.
This five-bedroom stone townhouse features a pine staircase and an Inglenuk fireplace, double doors from the lounge give access to an enclosed courtyard.
This five-bedroom, detached home blends traditional and modern design; the sleek kitchen features a gas hob and oven set within an exposed chimney breast.
Capitalise on the fabulous views of Trevone Bay by taking two homes and creating one spacious boutique B&B. Just a cliff-top walk from Padstow.
Surrounded by woodland, this five-bedroom manor house has plenty of outdoor storage space in the form of three converted loose boxes, two smaller outhouses and a woodstore.
This six-bedroom home is set amongst three acres of grounds. Currently a large family home, Clift Hill has potential to make a B&B or countryside retreat, subject to change of use permissions.
This Grade II-listed three-bedroom home is situated on a private road, just a short walk from the sandy beaches of Frinton-on-Sea.
Less than five miles from Malmesbury, this four-bedroom cottage comes with equestrian facilities and gardens that extend to approximately three acres.
Spanning three storeys, this late-Victorian five-bedroom farmhouse is a spacious family home with a modern interior and B&B potential.
With an original church arch, this triplex one-bedroom church conversion has a light, spacious, feel and comes with a secure off-street parking space.
This recently-refurbished three-bedroom home has bi-folding doors that lead out to a decked seating area - ideal for alfresco dining this summer.
Well-located for coastal walks and popular restaurants, this detached four-bedroom home offers views over farmland, to the Solent, the Purbecks and Bournemouth.
If you love high ceilings, school conversions like this one are bang on the money. This two-bedroom flat is minutes from Burgess Park and the foodie haven at Borough Market.
Set within a church conversion in Bermondsey, this two-bedroom maisonette combines existing features, such as original arches and brickwork, with a contemporary finish.
This four-bedroom Edwardian home offers a combination of original features and contemporary design after a renovation by the current owners.
This four-bedroom home offers a vaulted ceiling in a breakfast room that's ideal for summer entertaining with doors that open to the patio and garden.
On the market for the first time in more than 50 years, this six-bedroom home is a project with vast potential - spread over three floors of living space.
Surrounded by rolling countryside, this four-bedroom barn conversion comes with a self-contained, one-bedroom annexe that could serve as an office or a holiday let.
Located near Harrogate town centre, this five-bedroom Victorian terrace is arranged over three storeys while a current study serves as an optional sixth bedroom.
A ground-floor flat in a country house, located a mile from Sway; this two-bedroom home would make an ideal weekend retreat on the edge of the New Forest.
On a popular residential lane in Caterham on the Hill, this four-bedroom family home offers a secluded garden and a convenient location for local schools and public transport.
Just a short walk from Westerham green, this three-bedroom cottage has a light kitchen with exposed brickwork and double doors that lead to a south-facing garden.
In a prime spot opposite the River Thames, this one-bedroom flat has an 18sq ft reception room with glass doors that open out to a private terrace.
Set in the hills above Llanwrda Village, west Wales, this 18th-century three-bedroom farmhouse has holiday-let potential from a separate barn conversion and annexe.
This charming end-of-terrace townhouse is arranged over three floors, with two double bedrooms and a private courtyard garden located at the rear of the property.
Located in the University area, this semi-detached five-bedroom home is arranged over three floors - there's even a rear garden and off-road parking too.
Only a few minutes' drive from the charming town of Marlow, this two-bedroom home sits on the private riverside estate of Harleyford.
This detached four-bedroom home in Middleyard is arranged over two floors, with features that include a wood-burning stove and bespoke oak staircase.