Foreign retirees who flocked Thailand partly due to the cheap costs are now feeling the financial strain from stronger baht and stringent measures
Thailand ranks among the world’s top 10 destinations for retirement for the tropical climate, beautiful beaches, great food, and affordable cost of living. Budget-conscious foreign retirees flock to the country to live the good life. However, the recent surge in Thai baht is threatening their idyllic life in paradise as Thailand courts wealthier expats with their stringent measures.
British retirees flock Thailand partly due to the cheap costs. Two decades ago, a pound could be exchanged for 60 baht. But in the wake of Brexit and a stronger Baht, British expats have lost about 30% of their purchasing power. Other expats are also feeling the financial strain.
After sparking the 1997 Asian financial crisis, the baht rose 6% or a six-year high against the dollar in 2019. Bloomberg reported baht as the best performing currency in Asia. The baht’s resilience can be attributed to global investors, robust tourism receipts, and trade surplus.
Even though the baht depreciated during the first quarter of 2020, it is still stronger compared to the past years. Experts also expect the currency to stay resilient amid the U.S.-China trade war and even the worsening pandemic hitting economies worldwide.
Stringent measures turn retirement dreams into nightmare
Foreign retirees were also hit by stricter regulations, including changes in visa rules and a health insurance requirement. In February last year, foreigners were required to maintain a security deposit of 800,000 baht ($25,364) in a Thai bank account for two months prior to application of visa renewal.
Applicants are also required to have health insurance. This can be problematic for retirees aged 75 and over as insurance premiums can fetch exorbitant monthly fees. As a result, the outlook is bleak for expats getting squeezed financially due to the stringent measures. Many are leaving Thailand for neighbouring countries like Vietnam, Cambodia, and the Philippines.
Those who chose to stay have to simplify their lifestyle. In an interview with Bloomberg, Australian retiree Christian Foerster said, “There’s an enormous change. Everything is more expensive. But it’s about adjusting, adapting and living modestly.”
Despite stricter measures and a stronger baht, Thailand remains a top choice for foreign retirees because cost of living is still lower than their own countries. In 2018, the Thai government issued almost 80,000 retirement visas, a 30% increase from 2014.
The campaign to attract wealthier retirees
In the face of dwindling arrival of foreign retirees, Thailand continues to capitalise on the country’s sunny weather and affordable healthcare to attract expats over 50. To sweeten the pot, the Thonburi Healthcare Group launched Jin Well-being County in 2018, envisioned to be a five-star hotel for Westerners looking to retire in style.
The 3.7-billion baht retirement city has a hospital and apartments aimed at wealthy Thais and Asians. The plan also includes a 43-hectare facility in Krabi for foreign retirees.
An apartment at Jin Well-being County is 99,000 baht per sq. meter. Though on the expensive side, the developers explain that this will be an attractive option for foreigners looking to bypass some of the stringent retirement visa rules.
As part of the campaign to attract more wealthy retirees, the government is promoting an elite visa scheme with options for five-, 10- and 20-year visas ranging from 500,000 baht to 2 million baht. Elite visas can bring long-term certainty and security for foreign retirees as well as expats looking to invest or relocate in Thailand.
The community of expats in Pattaya are also getting some financial reprieve after the government dropped a revived immigration law following China’s ban on overseas tours due to the novel coronavirus, low tourist arrivals, and a weakened economy.
