France takes the second place spot followed by Australia in third, Ireland in fourth and Cyprus and the USA in joint fifth, according to retirement firm MGM Advantage.

Better weather, cheaper living costs and potentially cheaper property are all tempting retirees to move abroad.

However, people considering a foreign retirement destination could be caught out by local tax laws, exchange rates and other financial issues.

Andrew Tully of MGM Advantage said: “You could find your UK state pension frozen at the point of retirement if the country you choose to retire to does not have a reciprocal agreement in place with the UK.

“For example, if you retired to Canada ten years ago, your UK state pension would now be worth 42% less than if you had retired across the border in the US. Many retirees have found this has hit them hard.

“To help navigate the complexities of retiring abroad, it is vital people seek professional financial advice. There are a number of firms who specialise in providing advice to budding expats, which could make the world of difference between the retirement of your dreams or an altogether more challenging experience.”

Top tips for retiring abroad

1. Get an estimate of your state pension here.

2. Seek independent financial advice before you move

3. Tell HM Revenue and Customs that you are moving overseas. This allows them to let you know of any UK tax liability you may have even though you are living overseas.

And more importantly can allow any UK pension you have to be paid gross (no tax deducted) and taxed in your country of residence – if the country you live in has a double taxation agreement with the UK.

4. Check what reciprocal agreements are in place with the destination country regarding your UK state pension and other social security benefits

5. Find out about your welfare rights while abroad

6. Keep an eye on exchange rates

7. Check the cost of healthcare in the country you are thinking of moving to, and consider some form of medical insurance

8. If you decide to keep your property in the UK you will need to let your mortgage provider and insurance company know if it will be rented or remain empty

9. Do your homework on the cost of living in the country you want to move to

10. Notify utility companies, financial institutions and your local council when you are leaving

11. Contact the electoral register, and arrange for mail forwarding via the Post Office