Retirement in South Africa

Data from the Department of Work and Pensions show there are in the region of 40,000 Brits living in South Africa and drawing a UK state pension. The most popular cities for expats moving to South Africa are Cape Town and Johannesburg.

Living expenses

Brits retiring will find that their pound (or rand) goes further in South Africa, thanks to the country’s relatively low cost of living. But while day-to-day expenses, like housing, petrol and food shopping, is generally affordable there are added expenses like insurance, medical aid and possibly even security, which may be necessary depending on where in the country you are planning to live.

Financing your retirement

There are a number of key areas relating to retirement finances that you should consider when you are moving to South Africa, such as checking to see what impact a move will have on the benefits and pensions that you are entitled to receive in the UK.

When thinking of retiring to South Africa, it is essential that you seek independent advice when it comes to your private pension and UK state pension. This would ideally happen before arrival in South Africa.

It is important to inform the Department for Work and Pensions that you are moving overseas and provide them with contact details.

Currency exchange

Because South Africa’s currency is the rand, it is important to take the sterling-rand exchange rate into consideration, and what impact any major fluctuations between the two currencies may have on your lifestyle in South Africa. The rand is considered a volatile currency, so understanding the exchange rates is crucial (click here for more details)

Your pension

Aside from a private pension, there is a chance that you will also be entitled to receive a UK state pension while residing in South Africa. However, you should check with the International Pension Centre (IPC) to make sure that you are entitled. The IPC is contactable by telephone, email and post.

If you haven’t reached the state pension age yet, it is likely that you will receive a claim form around four months prior to you hitting the milestone. Contact the IPC if you haven’t received a letter three months before you reach state pension age.

Life certificate

A ‘life certificate’ is a form the Department for Work and Pensions might send you to check you are still eligible for the state pension.

If you receive a life certificate, you’ll need to get it signed by a witness and send it back, as instructed on the form. Your payments may be stopped if you fail to comply.

‘Frozen’ pension income

Sadly, a major downside to you option South Africa is that unlike pensioners who retire within the European Economic Area (EEA) and some other nations with special agreements with the UK, you will not be entitled to the annual index-linked rises on your pension whilst living in South Africa.

There are more than 550,000 ‘frozen’ pensioners around the globe, around 95% of which are believed to be pensioners who reside in Commonwealth countries.

Payment of your pension

Your state pension can be paid into a South African bank or a bank or building society in the UK. But you cannot choose to have it paid in to South Africa for part of the year, and a different country for the remainder of the year.

You can use a bank account in your name, a joint account, or somebody else’s account as long as you have their consent and stick to the terms and conditions of the account

To be paid money into a South African account from the UK, you must provide the sender with a SWIFT code and your bank account details.

You can elect to be paid every four or 13 weeks and will be paid in rand (the South African currency) if receiving money direct into a South African account. Consequently, the amount of money you receive may alter each time due to fluctuating exchange rates.

Income tax

You might be required to pay UK tax on your state pension over a particular amount. This very much depends on your taxable income and whether you are classed as a UK ore non-UK resident as far as tax is concerned.

Non-UK residents

Those of you who become a non-UK resident will not be liable to pay UK tax on your state pension but may be required to pay tax in South Africa. You do not have to pay tax in both South Africa and the UK due to the fact that there is a double taxation agreement between the two countries.

Healthcare in South Africa

Healthcare is deeply divided along state and private lines. There is a wide gap in standards between private and public healthcare sectors in South Africa. Like other African countries, the public sector in South Africa is under-resourced and over-subscribed, leaving private healthcare as the only real viable option.

Private healthcare in South Africa is generally recognised as being the best in the African continent, and even exceeds that in some European destinations. Some hospitals in Johannesburg and on the coast are centres of medical excellence, and attract health tourists from outside the continent.

Private cover

Private medical insurance is essential for anyone expecting to receive treatment to western standards. Comprehensive, rather than basic, cover is strongly advised. This is so that primary (GP) care is included, along with secondary (hospital) cover.

Emergency phone numbers in South Africa

Here is a listing of the numbers you may need in case of emergency.

Emergencies – 10111

Ambulance – 10177

Difficulty with emergency services – 1022

Police – 1011

Rescue service (aviation) – 083-1999

Medical rescue – 0800-111-990

Continue to section 6: Banking in South Africa

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