22,700 British pensioners will be spending their retirement – in the Caribbean this winter, according to a study by easyMoney, the investment platform from Sir Stelios Haji-Ioannou’s easy family of brands.
Data provided to easyMoney by the Department for Work & Pensions shows that Jamaica dominates the list of Caribbean retirement hotspots for UK pensioners. 57% (12,840) of all UK expat retirees in the Caribbean live on the island.
Jamaica’s capital Kingston saw temperatures of 30 degrees Celsius on New Year’s Day, with the temperature in London at 9 degrees Celsius for comparison.
The other major UK expat pensioner hotspots in the region include Barbados with 4,300 UK retirees (19%), and Trinidad & Tobago with 1,220 (5%). Ten British pensioners have even retired to Cuba.
easyMoney says the figures are a timely reminder to people in the UK that a retirement in the Caribbean is a very achievable dream. But this can only happen if they build as big a retirement fund as possible through better investment returns.
easyMoney adds that the returns available to cash savers are unlikely to be enough to fund a Caribbean retirement for most people, with the best easy-access ISA currently offering just 1.45%. This is significantly less than inflation at 2.4%, meaning a cash ISA destroys value in real terms.
For investors willing to look at investments with a different risk/reward profile, an Innovative Finance ISA (IFISA) can offer much higher risk-adjusted returns. easyMoney’s IFISA currently offers a rate of up to 7.28%.
Andrew de Candole, CEO of easyMoney, says: “Retiring to a Caribbean island is the dream for a huge number of people. With long-term saving and the right investment returns, that dream can become a reality.”
“A retirement in the Caribbean offers a lifestyle that the UK simply can’t match. Building up the retirement pot you need to fund that is not out of reach, so long as your retirement savings deliver the returns you need.”
“Unfortunately, the returns on cash at present mean that putting your retirement savings in cash is actually getting you further away from a Caribbean retirement, not closer. Cash ISAs destroy value every day by paying interest rates below inflation.”
“Putting some of your retirement pot in a higher-yielding investment can be the difference between spending Christmas on a beach in Jamaica, and wrapping up for the cold in the UK.”