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.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Mark Dampier: An infrastructure fund that builds returns by taking different roads
Simon Read: Timeshare owners accuse Macdonald Resorts of land grab
Donald MacInnes: Let's pretend Scotland won and now a salmon is running the country
Five Questions: Changes to car tax discs
Bargain Hunter: Win a new iPhone 6
- 1 Scottish referendum: So how about the English now being given a chance to split from England?
- 2 Friends 20th anniversary: Alison Jackson photographs reunited cast
- 3 London council removes 'unacceptable' Stamford Hill posters telling women which side of the road to walk down
- 4 The response to my Pizza Express review has been overwhelming, and taught me a lot about journalism
- 5 Free U2 album: How the most generous giveaway in music history turned into a PR disaster
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...
Day In a Page
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize