Retirement plans could be scuppered in non-EU countries

The top five retirement destinations for British pensioners are Spain, France, the USA, Canada and Ireland, research from Standard Life has revealed

Those looking to retire abroad, however, have been warned that emigrating may affect their pension payout in the long run.

When individuals emigrate, increases to their UK state pension only apply if they are living in an EU state or in a country with a reciprocal social security agreement with the UK. Outside of these countries, migrants' yearly state pension income is frozen at the amount paid when first claimed.

This means that Brits emigrating to Australia, Canada, New Zealand and South Africa would all face pension freezes, which in real terms could mean an income cut.

Andrew Tully, senior pensions policy manager at Standard Life, says: "One significant consideration before you move is to think about your state pension and what, if any, reciprocal agreement is in place.

"If there isn't a reciprocal agreement in place, then you need to be very careful your retirement income is sufficient to cover your living costs over a long period of time.

"Over a 20 year retirement, your basic state UK pension could halve in real terms if a reciprocal arrangement is not in place."