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The costs of retiring abroad

Where your pension could go further

If you’re concerned about your pension pot lasting you all the way through retirement, you could think about relocating to a destination with cheaper living costs.

Let's compare the costs of settling down at home with 3 of the most popular retirement hotspots for Brits retiring abroad. 

Retiring in the UK

Many of us take retirement as the opportunity for a change of pace or to downsize.

Coastal and countryside locations, such as East Devon, tend to be popular with retirees. Let's see how the costs stack up.

The cost of retiring abroad

Average property prices 1

£2,605 per square metre (UK average is £2,928)

Living costs 1:

Average monthly food bill for one: £175.91

Restaurant meal for two: £50

Petrol: £1.12 per litre unleaded 2

Monthly utilities (electricity, heating, facilities): £141.42

Your pension: taxed as income at the usual rate (0-45%)

Retiring to Spain

With its pleasant climate, blue seas and plentiful expat communities, Spain is a consistent favourite with UK retirees 3.

Property prices have taken a hit since a 2008 high and while they’re just starting to recover, you can still pick up plenty of bargains, even in the ever-popular coast east of Malaga.

Average property prices 1

£1,398.48 per square metre (52.3% cheaper than the UK)

Living costs 1:

Average monthly food bill for one: £167.50

Restaurant meal for two: £31.27

Petrol: £1.07 per litre 2

Monthly utilities: £101.03

Your pension: A double tax treaty with Spain means that your UK-based pension will only be taxed in the UK.

Retiring to France

Just a short hop across the Channel, France is the UK’s second most popular retirement destination abroad 3

It’s a vast country with huge regional variations, and property types and prices range from the chic centres of Paris and the Côte d’Azur to the rustic cottages of Provence.

On average, you can find homes in many of the most popular areas slightly cheaper than in the UK.

Average property prices 1

£2,675 per square metre (8.52% cheaper than the UK)

Living costs 1:

Average monthly food bill for one: £260.05

Restaurant meal for two: £44.70

Petrol: £1.22 per litre 2

Monthly utilities: £119.72

Your pension: The UK also has a double tax treaty with the France, meaning your pension will only be taxed in the UK.

Retiring to Italy

Italy is the 3rd most popular destination for Brits retiring abroad 3, and with so many of us heading to Tuscany, the area’s been dubbed Chianti-shire.

If you’re looking for a slower pace of life among the vineyards and olive groves, Italy could be a place where your pension pot goes further.

Average property prices 1

£1,927.50 per square metre (34.24% cheaper than the UK)

Living costs 1:

Average monthly food bill for one: £231.59

Restaurant meal for two: £44.68

Petrol: £1.39 per litre 2

Monthly utilities: £132.31

Your pension: Italy is another country where the UK has a double tax treaty.

A few more things to consider

Remember, whenever you’re buying a property the costs don’t stop at the asking price. There will most likely be fees for estate agents, lawyers and surveyors.

And obviously, all costs abroad will be affected by fluctuations in the exchange rate, as you will most likely have your pension paid into a UK bank in sterling.

A final factor is the ongoing Brexit negotiations, which could potentially affect the double tax treaty that the UK currently has with the countries we’ve looked at – but right now it’s too soon to say.

Try our pension calculator to see if you can afford to retire to one of these popular destinations. 

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