How to Invest for Passive Income as an Expat

September 2025

By Will Glyn

The idea of creating an income stream that pays you without working is nothing new — it’s the foundation of most retirement plans. In recent years, the concept has been repackaged as ‘passive income,’ with many people looking to make the most of their assets to boost earnings while still working. For expats, this idea often has an extra layer of importance: building income streams that work flexibly across borders.

Passive income can take many forms — from letting out property back home to side ventures abroad — but one of the most effective ways is through investing. A well-structured income portfolio can provide stability, flexibility, and the peace of mind that comes with knowing your money is working for you wherever you’re based.

How much do you need?

The amount depends on your lifestyle and future plans, particularly where you intend to retire. As a guide, an investment portfolio might produce a yield of around 4%. That means to generate an annual income of £10,000, you’d need a pot of roughly £250,000.

Some expats may already have savings or inheritances to put towards this goal. For others, it may mean building a pot gradually. For example, contributing £6,000 a year for 21 years, with an assumed growth rate of 6% annually after charges, could get you there. While it may sound like a long journey, remember that property owners often commit to 25–30 year mortgages to generate rental income — income investing is simply a different path to the same goal.

Investing for income

Dividend-paying stocks are a common way to generate income, but choosing the right companies requires more than simply looking at yields. Factors like dividend cover (how sustainable the payments are), dividend growth (whether payouts keep pace with inflation), and dividend volatility (whether income is stable or cyclical) are critical to long-term success.

For expats, investing directly in individual shares across multiple markets can be complex. Local tax rules, foreign withholding taxes, and currency exposure all need to be managed carefully.

Income funds and trusts

This is where funds and investment trusts come into their own. They provide instant diversification, professional management, and access to global income opportunities that might otherwise be difficult to reach as an individual investor. Investment trusts in particular can smooth dividend payments, which can be attractive if you rely on consistent income while living abroad.

Bonds and multi-asset solutions

Bonds are also an important building block for income investors. With higher yields than in recent years, they can provide a steady income stream and reduce overall portfolio volatility. Bond funds spread risk across many issuers and can focus on government, corporate, or blended strategies.

Multi-asset income funds offer a complete solution, combining shares, bonds, and sometimes property, infrastructure, or alternatives. These are particularly useful for expats who want a balanced income approach without having to manage multiple accounts or navigate different international markets themselves.

Building your income portfolio as an expat

For expats, income investing is not just about generating cash flow — it’s about structuring it in a way that’s tax-efficient, globally diversified, and flexible enough to adapt if you relocate again in the future.

At Proctor Wealth Associates, we specialise in helping expats create tailored portfolios of income-generating investments, structured to fit their cross-border circumstances and long-term goals. If you’d like to explore how we can build an income strategy designed around your needs, please get in touch — we’d be delighted to help.

Will is an Independent Financial Adviser with over a decade of experience helping expats make the most of their international status.