Want to retire at 60 instead of 70 – Financial expert reveals a route to potentially cut your retirement age by up to ten years

Sotia Hadjineocleous, CFA, Financial and Investment Manager at Domenica Group, explains how moving to Cyprus can significantly reduce your retirement age.

The state pension age is creeping up yet again, with Brits expected to work till 67 before being able to access their savings, and many working beyond that in order to afford a comfortable retirement.

But a financial advisor has now revealed that retirees leaving the UK for Cyprus could, in some cases, bring their retirement forward by as much as ten years, depending on individual circumstances.

Sotia Hadjineocleous, Financial and Investment Manager at Domenica Group, says the combination of lower living costs and a far more favourable pension tax rate makes Cyprus one of the most financially sensible retirement destinations available to British workers today. She explains:

“The cost of living in Cyprus can be roughly 20% to 40% lower than in many parts of the UK, depending on lifestyle and location, which alone can dramatically reduce the size of the retirement pot a person actually needs before they can completely stop working.

“The moment you run the numbers on what life genuinely costs in Cyprus versus what it costs in, say, London or Manchester, the gap is striking. People who believed they had another decade of saving ahead of them suddenly find they are in a much stronger financial position than they thought.

“Pension tax treatment is another area where Cyprus pulls well clear of the UK. Retirees drawing pension income in Cyprus can, under current rules, pay as little as 5% tax on qualifying pension income, a rate that bears little resemblance to what the same income would attract back home.

“The tax advantage alone can completely change retirement plans for the better. When your pension is taxed at a fraction of what it would be in the UK, your monthly income stretches much further. This makes earlier retirement a far more realistic option.

“And it’s not just about housing and taxes. Everyday essentials like groceries, eating out, transport and utilities all tend to be cheaper in Cyprus, so monthly spending naturally comes down without people really having to change how they live. 

“The practical implication is that a British worker who might otherwise need to work until their late sixties could, with proper planning and sufficient savings to bridge the gap until the UK pension access age, potentially retire in their late fifties by choosing to relocate. 

“The earlier a person starts thinking about it, the more runway they have to structure their finances accordingly. However, the extent of this advantage will vary depending on an individual’s pension structure, savings level and intended lifestyle.”

Sotia emphasised, though, that the route requires preparation. Tax residency rules, pension transfer considerations and estate planning all need proper attention before anyone books a removal van.

“There is a lot to get right, particularly around tax residency status and pension structuring, and the order in which you do things matters. People who plan and take the right advice before they move tend to be the ones who genuinely achieve the earlier retirement they, and many other Brits, are aiming for. Those who leave it until the last minute often find they missed an opportunity.”