France has long been the top retirement destination for British expats. The quality of life, warm climate, excellent healthcare and close proximity to the UK make it especially appealing. Yet for British retirees, the financial landscape in France is very different to that of the UK. How you structure your pensions, investments and tax planning will determine how comfortable and secure your retirement really is.
The most successful retirees share one thing in common: they built a clear strategy before relocating or shortly after arriving. This article focuses exclusively on the best financial retirement strategies for British expats who plan to live permanently in France.
1. Know Exactly How Much Income You Need Each Month
Although lifestyle varies widely across France, most British retirees find that 2,200 to 3,000 euros per month for a couple provides a comfortable standard of living outside Paris or the Côte d’Azur.
However, the key is not only how much income you need, but how efficiently and predictably you receive it.
British expats should take into account:
The impact of fluctuating GBP EUR exchange rates
If your pension income is paid in sterling but your life is in euros, your monthly budget can rise or fall simply based on currency movements. For retirees on a fixed income, this unpredictability can be stressful.
Taxation under French residency
Once you become tax resident in France, your worldwide income is taxable in France. Ignoring this can lead to unexpected liabilities.
A structured retirement income plan that blends pensions, investments and currency strategy ensures long term financial stability.
2. Understand How UK Pensions Are Taxed in France
A common question is: do retired British expats pay taxes in France?
If you are a French tax resident, yes. UK private pensions, workplace pensions and SIPPs are generally taxable in France.
Key points for British retirees
• The UK France tax treaty prevents double taxation.
• Most UK pension withdrawals are taxed only in France, not in the UK.
• The way you draw your money affects your tax bill.
• The 25 per cent UK tax free lump sum is not automatically tax free in France. Many expats misunderstand this.
Because France taxes pension income differently from the UK, tailoring your withdrawal strategy to the French system can result in meaningful long term savings.
3. Consolidate and Simplify Your UK Pensions
Many British expats hold several pensions from past employers. Managing them across borders becomes increasingly difficult in retirement.
Consolidating into a more flexible, transparent and internationally portable structure, such as an International SIPP, often provides major benefits:
• More control over investment strategy
• Choice of currency including euro options
• Clearer tax planning for French rules
• Reduced administrative burden
• Potentially lower overall fees
For British expats who intend to remain in France permanently, consolidation is typically one of the most impactful financial decisions.
4. Adapt the 4 Per Cent Rule to French Taxation
The 4 per cent rule is a popular guideline for retirees, suggesting that around four per cent of a portfolio can be withdrawn annually while maintaining capital for life.
However, British expats must adapt this rule to the French system. French income tax, social charges, and exchange rate risk all influence your actual net income.
A more appropriate method involves:
• A flexible, rather than fixed, withdrawal rate
• Regular adjustment to market conditions
• A euro based portfolio to stabilise underlying value
• A tax efficient drawdown sequence that prioritises lower tax sources first
This ensures your retirement income is sustainable and protected.
5. Consider a Move Towards a Euro Based Investment Strategy
British expats living in France permanently must consider which currency their investments are held in. Spending is in euros. Many pensions remain in pounds. The mismatch creates risk.
Why euro based investing works well for British retirees in France
• Reduces exposure to GBP EUR volatility
• Makes monthly budgeting predictable
• Improves long term retirement planning accuracy
• Aligns your investments with your life in France
• Enables access to French tax efficient wrappers such as Assurance Vie
You do not need to abandon sterling completely, but the right balance between currencies is essential.
6. Use Assurance Vie for Tax Efficiency and Estate Planning
Assurance Vie is one of the most advantageous tools available to British expats.
It offers:
• Tax deferral on investment gains
• Reduced tax rates on withdrawals after the policy matures
• Ability to hold multiple currencies inside the same policy
• Significant inheritance tax benefits, especially for non French assets
British expats are often surprised by how much tax they save once investments are held within an Assurance Vie rather than in standard UK accounts.
7. Protect Your Income Against Exchange Rate Movements
Currency fluctuations represent one of the most significant risks to British retirees in France. If sterling weakens, your pension instantly becomes less valuable.
Ways to reduce this risk include:
• Holding pensions or investments in euros
• Creating a currency neutral withdrawal plan
• Using platforms with multicurrency capability
• Converting funds strategically rather than reactively
A balanced approach ensures you are not forced to adjust your lifestyle because of unpredictable market shifts.
8. Plan Properly for Healthcare and Long Term Care Costs
After three months of legal residency you can access France’s universal healthcare system through PUMA. It is excellent, but there are contribution fees and top up insurance is usually recommended.
Long term care should also be planned early, as costs can be significant. Proper financial planning ensures your assets remain protected.
FAQs – Best Retirement Strategies for British Expats Living Permanently in France
Can British expats collect their UK State Pension in France?
Yes. The UK State Pension can be paid directly into a French bank account and is uprated annually under current rules.
Where do most British expats retire in France?
The Dordogne, Charente, Brittany, Normandy and the Côte d’Azur remain the most popular regions.
Is retiring in France a good idea financially?
For most British expats, yes. With proper planning, France offers a tax efficient environment, excellent healthcare and a high quality of life.
How much money do you need to retire comfortably in France?
A couple typically aims for 2,200 to 3,000 euros per month. Investment structure and tax efficiency matter more than the exact figure.
Speak With a Cross Border Financial Adviser
Retiring in France as a British expat opens the door to a wonderful lifestyle, but the financial landscape is complex. Structuring pensions, investments and income flows correctly can make a lifelong difference.
Speak with a Harrison Brook adviser today and ensure your retirement in France is efficient, secure and fully optimised.