Changes from April 6 will allow those people in the UK aged 55 and over to withdraw all the money from their pension scheme, with 25 per cent as a potentially tax-free lump sum. Alternatively, they can withdraw it in chunks with 25 per cent tax-free and the remainder taxed at their marginal rate.

Malta has actively set out its regime to encourage people to retire here with its Malta Retirement Programme (MRP).

By taking up the MRP, beneficiaries will be able to benefit from a tax rate of 15 per cent on any income arising outside Malta which is received in Malta.

To qualify for the scheme, the applicant must be an EU, EEA (Iceland, Norway and Liechtenstein) or Swiss national. You will also need to either purchase or rent a property in Malta (€275,000 value or €9,600 a year rental) or Gozo (€250,000 value or €8,750 a year rental).

What is clear is that you should make no decision on what to do with your pension pot until you have sought professional financial advice. Your pension pot is supposed to be for life and you need to carefully invest your funds to be able to live the lifestyle you have always dreamed of.

Jan Bjorkmann, Blacktower Financial Management (International) Ltd, tel: 2149 6769; e-mail: info@blacktowerfm.com. Blacktower Financial Management (International) Ltd is licensed by the FSC Licence 00805B.