Better diet, health care and inflation are playing havoc with economic planning as people are living longer and benefitting from higher than planned increases in pension payments.

The need for taking steps to fund retirement is becoming more important every day – as the latest UK government figures show life expectancy is increasing every year.

State pension age is likely to retreat to 68 years old by 2027, according to calculations by the Office of National Statistics – and the magic 70th birthday is in sight as day to start collecting state pension.

In real terms, that means you can expect to live three months longer for every year that passes.

For retirement savers and the government increasing longevity is causing a big financial problem.

Until the new figures were released, the government was working on the state pension age hitting 68 in 2046 – now the estimate is 20 years earlier.

For UK pension savers, the future is shrouded in huge uncertainty as the government struggles to come to terms with how many billions are needed to fund the state pension.

Already, Chancellor George Osborne is wrestling with how to fund the government’s triple lock promise that cemented state pension rises at a maximum of 2.5 per cent or the annual rise of the consumer price index (CPI).

Currently, CPI is running at an unexpected 5.2 per cent and is expected to inch higher before falling.

One way to take control of a pension is open for ex pats – a QROPS offshore pension scheme.

Shifting UK pension funds in to a QROPS removes them from the problems of continually revising financial strategy in line with unexpected rule changes.

Now that Portugal’s fellow European member states have agreed a financial rescue package, there is added pressure for the country to tighten its belt. Accordingly, this week Portugal has bitten the bullet and announced some significant tax measures that it hopes will move reduce the deficit.

Firstly, the government proposes to introduce a capital gains tax of 20% on stock market gains. However, this will only yield a decent sum for the country’s coffers if anyone actually makes any money on shares – a fact which has caused the Portuguese government to admit that their prediction of an extra 200 million euros a year from this measure is unlikely in the short term.

What does this mean for the overseas investor? Nothing, apparently. Non-residents are going to be excluded from this tax. Smaller investors are also exempt, so anyone with 500 euros or less to invest in Portuguese shares will not have to pay.

The second tax measure that is bound to raise eyebrows is the creation of a new tax band, applicable to those earning more than 150,000 euros. These high earners are tipped to pay 45% on their earnings from 2011. The introduction of this rate is expected to make the Portuguese government an extra 30million euros next year.

Proposed austerity measures are not just about tax rises. Spending cuts are also imminent. Notwithstanding the government’s commitment to invest in a new airport for Lisbon, this has been shelved for the time being to save money.

Finance Minister Fernando Teixeira dos Santos has said that the worst is not over. If more tax rises are necessary, he claims that the government will have to resort to such measures to reduce the deficit.

The precise measures have not yet been announced and indeed may not yet have been decided by the Indonesian government. However, Finance Minister M S Hidayat has said that the measures are to exist for five years, and will be targeted on a case by case basis to ensure that investment is directed towards the right industries.

Clearly Indonesia is aiming this measure in the first instance at the corporate sector but the proposal sends a clear message that the country is open for business.

Mauritius has also given a clear indication that it is looking for more foreign money this week. The Stock Exchange of Mauritius (SEM) is reinventing itself to widen the class of investments that will be within its remit. The exchange now permits professional and specialist collective investment schemes and closed-end funds.

According to SEM’s CEO, the exchange seeks to continue to expand its domestic equities base but also to open itself up as a multi product based internally focussed offshore investment hub.

In recent years things have been looking healthy in Mauritius. When European trade preferences started to move away from the island in 2000, Mauritius found that it could not rely on revenue from sugar exports alone. Taking a long term look into the future, the island sought to reposition itself as a centre for business outsourcing and offshore investments.

Notwithstanding the global recession, Mauritius’ financial services industry is reported to have grown by an average rate of 7.6% in the last four years. Perhaps the new listing rules will generate an even better rate of growth.

A species of fraud, tax evasion is a crime and an all round Bad Idea. Precise definitions vary among international jurisdictions, but the international community typically agree that evasion involves deliberately not paying tax that is owed. So for example refusing to pay a tax bill or failing to declare income or a capital gain are both incidences of tax evasion.

Next on the spectrum of seriousness when you talk about non payment of tax is avoidance. Avoidance involves using a tax system to reduce your tax bill. While the taxpayer (or more appropriately, the non taxpayer) does not do anything illegal, the UK and US taxmen have taken the view that tax avoiders are acting against the spirit of tax legislation, and are typically swift to close loopholes that allow non payment of tax where government’s intended it should have been paid.

Avoidance is a grey area. On one hand, if a loophole exists, then a taxpayer should be entitled to take advantage of it. On the other hand, tax authorities may start up their anti avoidance provisions and come after tax avoiders if they suspect that a scheme constitutes unacceptable tax planning. If a series of offshore investments is intended to be a tax avoidance measures, investors need to make sure that they have received sound professional advice to ensure the effectiveness of the proposed measures.

Tax mitigation is at the opposite end of the spectrum from tax evasion, although some would argue that there is no clear cut distinction from tax avoidance. By using reliefs and exemptions, taxpayers can lawfully mitigate their liabilities without fear of being stalked by a suspicious taxman.

Malta has reinvented itself recently as an innovative player on the overseas investment scene. The MFSA granted several new licences in the previous twelve months for fund managers and professional investors to operate in their jurisdiction. A lender was added to the list of approved banks, and many more insurance providers have been permitted to operate on the island.

Malta’s recent entry into the market for QROPS (Qualifying Recognised Overseas Pension Schemes) which can receive UK pension funds free from UK income tax has confirmed the island’s status as a respected financial centre. QROPS is a market that has been recognised as a growing one, and Malta may be attractive to those who are looking to place their pension in an EU country that has a largely English speaking workforce, and a relatively favourable tax regime.

The jurisdiction is also seeking to reach markets outside the EU, and is reported to have signed agreements or memoranda of understanding with seven other foreign countries this year. The island has also invested in some research projects and is seeking to align itself as a new entrant into the Sharia investment market.

Unlike most other countries, claim the MFSA, Malta’s financial services sector has grown overall, increasing the number of people who work in the sector by over one percent. With so much doom and gloom coming from the E.U.’s financial press (particularly involving Spain and Greece, but other placed are not that rosy either), it is heartening to read about an EU member state that considers itself objectively to be doing well.

Bonds and other debt related products were so far removed from an actual, tangible thing that investors felt confused and unsure about where to invest next. This sentiment may perhaps explain why property markets have recovered more quickly than expected. After all, what is more tangible than bricks and mortar?

But recent results from the Liv-ex 100 (the main fine wine index), have shown that investors may now be branching out into other assets that they can grasp – and taste!

For the past 14 consecutive months the Liv-ex results have shown a steady increase in prices. In May alone prices rose by 4.4%. On one day alone in Hong Kong, sales went through the roof. An Acker, Merrall and Condit auction raised HK$152 million (a record breaking amount), and a Christie’s auction raised HK$40 million.

The wines that dominated the sales were French in origin, but given their age this is no surprise. Perhaps in the next couple of decades vintages from the New World may also become more valuable to reflect modern drinking preferences. Either way, the trend towards wine looks set to continue.

What explains this growth? Demand is on the rise from the emerging markets and has remained steady in places that are more traditionally interested in buying fine wines, including Europe and the United States. However, the supply remains finite – new vineyards realistically take decades to become established and there is a limit to how much grape harvests can be improved.

However, a sobering thought for UK resident wine enthusiasts was the CGT rise for higher rate taxpayers in Tuesday’s Budget.

Of course, there are varying degrees of sticking to these principles. Most blue chip companies subscribe to a standard of corporate social responsibility, although some are more responsible than others.

Is this just window dressing? Or are companies really becoming more ethical to seek more investment and custom?

Research by Moneyfacts website suggests that ethical investments may be becoming more popular, but that does not make them better performers. The website found that over five years (the timescale that is typically quoted for a medium to long term investment), ethical funds yielded 33.48%, compared with the 45.87% that other non ethical funds realised.

Results over other timescales that were examined followed similar trends. However, looking at the results alone is not necessarily a way to measure the satisfaction that ethical investors may have felt at these outcomes. After all, the ethical funds still gave a healthy return, and what price can you put on their knowledge that their money had not been used to further a business fuelled by child labour, tobacco or pornography?

Recent research from the Pension Trust has found a high demand for ethical pensions among charity workers, although it could be argued that the results are not surprising when you take into account the fact that those people already work in a sector that is supposed to be sustainable and moral-driven.

72% of the people who were asked wanted their pensions to be invested ethically, with 61% saying that they would definitely take more responsibility for investigating exactly what happened to their money after they made a pension contribution in future. It would be interesting to see what proportion of the general population take this account when choosing where to invest their money.

When the previous government put forward their pension simplification initiative in 2006, they failed to dot all of the “i”s and cross all of the “t”s.

Significantly for pension savers, the government forgot to mention that certain overseas pension schemes were exempt from UK inheritance tax. Finally, in February 2010 new regulations were published which confirmed that Qualifying Non UK Pension Schemes enjoyed that exemption.

As experts picked over the rules, it became clear that QNUPS, as they became known, would offer a number of IHT planning opportunities.

Firstly, they offered a chance for savers to secure IHT protection immediately for assets that had been contributed to the schemes. Compare to UK based IHT planning strategies, which may often take up to 7 years to take effect, QNUPS offer a distinct advantage because assets are protected straightaway. They also benefit from certainty. After all, HMRC has now confirmed their position.

There is no maximum limit on how much you can contribute

For most types of pension schemes that are linked to HMRC, the government puts a limit on the amount that you can contribute during the course of your lifetime. The effect of this measure is that the amount of tax exemptions that can be claimed is limited, as it would be politically unpalatable to lower paid workers that higher earners should receive tax relief on an unlimited sum.

With QNUPS, on the other hand, whilst there may be no tax relief, the pay off is the raft of other tax advantages, like CGT and IHT exemption.

Opens up non DTA countries to British pension savers

With QROPS, which have been around since 2006, investors only have the option of going to countries that have entered into double taxation agreements with the UK. This is because the QROPS hosting country’s tax authorities need to report back to HMRC about the scheme’s activities in the first 5 years of its existence. With general QNUPS there is no such insistence, so QNUPS will be available in many more countries than QROPS.

A pensions specialist will be able to help you to assess your expectations and needs to the future, whether that involves drawing an income or taking lump sums from your pension scheme.

The important thing to note about QNUPS is that all of the schemes that are available are spread across the world. So if you limit yourself to using an adviser who deals only in the products of one provider or schemes based in one particular country, you run the risk of inadvertently excluding yourself from the most competitive deal out there for you.

But aside from independence and expertise, what else can you expect from a QNUPS adviser? A realistic appraisal of the long term implications of using a QNUPS is essential. Do not forget that QNUPS are not just inheritance tax avoidance schemes (effective though they may be). Instead, as pensions they inevitably tie up your money and assets for the long term. Accordingly, if you think that you may need access to them before the scheme’s retirement age, you may wish to consider an alternative place for your wealth.

Finally, whilst the tax position on QNUPS is very favourable from the point of view of the UK taxman, this may not necessarily follow from the point of view of the tax authorities in the country in which the QNUPS is based. So you need a QNUPS adviser who will be able to tell you what the implications may be from that perspective, and preferably someone who can help you select a scheme in a place that will be tax neutral.

Whilst this may be typical of that kind of age group, a third of those who were going to be dependant on their husbands in retirement had absolutely no idea about what kind of retirement income they could expect as a couple. The survey revealed that a significant proportion of women who were approaching retirement had either not expressed an interest or not directed their minds to the issue of how the last twenty or so years of their lives would be financed.

The Prudential survey reflects a worrying trend that emerges from other similar studies – a failure to engage with the issue of how people are going to survive financially in their retirement. The people that Prudential interviewed were 40 or over, so they still had a couple of decades of useful working life ahead of them. Accordingly, the survey had involved speaking to people whose children had grown up and left home, and who now should be concentrating on putting some money away for their old age.

The study does not reveal whether the lack of savings or awareness is due to an ostrich approach (where workers bury their head in the sand and ignore the issue) or whether there is a sense of despair that they have left it too late.

Perhaps most worryingly, a quarter of the respondents thought that the state pension would support them, although no comments were reported on what the participants thought about the level at which the state pension is currently set.

A third of those who were polled have made their own provisions, which is a significant minority but still low in a climate where the inadequacy of the state pension has been talked about in the media for decades.