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In the report obtained by The Nation, 400,000, UK expats are voting with their feet and choosing to retire abroad according to findings from Alliance & Leicester International (ALIL). France (18 per cent) is the most popular retirement destination for expats followed by Spain (13 per cent) and then the UK (12 per cent).

However, while 88 per cent of expats intend to retire abroad, access to UK based family and friends still appears to be important with 57 per cent intending to retire in Europe. Indeed, 10 per cent of expats cited being away from family and friends as a major barrier to retiring outside the UK.

Further afield, Thailand (5 per cent), the US (4 per cent) and New Zealand (3 per cent) are all potential retiree destinations. Expats intend to fund their new lives in the sun through a variety of methods including savings (27 per cent), UK State Pension (23 per cent) and private pensions (20 per cent). Property is a big source of retirement funding for expats with 6 per cent relying on rental income, 6 per cent intending to sell a residential investment and 2 per cent planning to take out an equity release plan.

When considering the key factors that contribute to the chosen retirement destination, better quality of life was voted top (21 per cent). Better weather came second (20 per cent) and value for money third (14 per cent).

However the expats, who intend to retire abroad, do have some concerns about retiring in another country. The quality of medical facilities and dealing with general medical issues - potentially in a foreign language - was the biggest worry for 1 in 5 expats (22 per cent).

Finances were also a concern with 13 per cent worrying about exchange rates and 12 per cent concerned about having sufficient money to survive. Frailty was also a concern with 14 per cent of women citing this as a worry compared to just 10 per cent of men.

Lynette Byrne, Head of Marketing at Alliance & Leicester International, said "It is interesting to see that many UK expats have settled in their new home, with 87 per cent of UK Expats intending to retire abroad.

"However, while some Expats might prefer life outside the UK, they are still very attached to friends and family thus settling in European destinations that are only a low cost flight away.

"This research really highlights the international nature of society today and raises some interesting questions as to how people are going to manage their finances and protect their savings against interest rate fluctuations.

"Expats who bank with Alliance & Leicester International can choose to hold their savings in a Sterling, US Dollar or Euro account giving them not only access to 'Best Buy rates but also the opportunity to shield their retirement cash from currency fluctuations. They can also be safe in the knowledge that they can access their money using internet banking 24 hours a day no matter where they are living."