The countries that are cheaper to live in than Britain: how you can be £700 better off and live in the sun by retiring in Spain

If you’re jotting down dreams of retiring abroad, put Spain at the top of your list.

Living in Spain is over £700 a year cheaper than in Britain – and that’s not even taking into account the wealth of sunshine and delicious food.

Spain has been crowned the most affordable country to live in for British expats in a report by foreign property experts Property Guides.

It found the same range of daily expenses, including groceries, healthcare, travel and leisure, which currently cost a total of £1,996 a year in Britain, and just £1,295 in Spain.

That means you can enjoy the same standard of living in the Mediterranean for 35 percent less than in Britain – leaving you with £701 a year to spend on yourself.

Even great British staples like English breakfast tea bags can be bought in Spain for less than they cost on the shelves in Britain.

Among the most popular countries for Brits to settle, Italy is the second cheapest, with prices £544 per year lower than Britain.

Of the thirteen expat hotspots around the world analyzed by Property Guides, only two countries are more expensive to live in, according to the report.

Australia and New Zealand require a bigger budget (£166 and £311 more respectively) if you want to maintain the same lifestyle.

However, France, Portugal, Greece, Germany, Cyprus – and even the US – are all more affordable.

The results are perhaps no surprise after eighteen months of high domestic inflation.

Annual price increases in Britain slowed late last year to the lowest level in more than two years, at 4 percent in December, but the cost of living is still rising faster here than in most other developed countries.

By comparison, inflation in the eurozone fell to 2.9 percent in the year to December.

Christopher Nye, of Property Guides, says: ‘It seems increasingly difficult to make ends meet in Britain, which is why more Brits are considering moving abroad for a more affordable, warmer and more exciting lifestyle.’

So how do prices compare and how easy is it to move if you dream of retiring abroad?

Living in Spain

With the promise of 3,000 hours of sunshine a year, it’s no wonder millions of people have swapped Britain’s rainy weather for the warmer climate of Spain.

According to the latest available official data, the country has a large expat community of more than 103,000 people receiving the British state pension in Spain as of 2020.

And it’s a financially smart move, as your pension savings will stretch much further than in Britain.

The average weekly shop – a basket of 17 basic groceries, such as bread, fish and eggs – costs £27.76 less in a Spanish supermarket than on the British high street.

The same items in Britain would cost you almost 53 percent more at £79.99 versus £52.23, Property Guides finds.

Prices in Spanish supermarkets are considerably cheaper for the basic products of the Spanish diet.

Alcohol is also usually much cheaper – according to the report, a bottle of gin will cost you £9.44 in Spain, compared to £25 in Britain.

The cost of touring, including petrol, train tickets and renting a car, is also much cheaper.

According to the report, renting a small car in Spain for a week (without insurance or extras) costs £73, compared to £238 in Britain.

When it comes to enjoying local cuisine, such as a traditional paella paired with a fruity sangria, a three-course meal at a local restaurant costs just £15 in Spain – £10 cheaper than in Britain.

Similarly, a cinema ticket costs just £7, less than half the price in Britain.

Lives in France

The country is an established favorite with British expats, whether you dream of a castle in a provincial village, a villa on the Mediterranean coast or a chalet in the mountains.

Although life there is not as cheap as in Spain, it remains around 7 percent cheaper than in Britain, according to Property Guides.

France is ranked fifth most affordable when it comes to supermarkets, costing £67.79 for a basket of supermarket essentials and a few luxury items, including a bottle of gin and a bar of dark chocolate. Fresh produce is significantly cheaper in season, the report shows.

Wine lovers can rejoice: a bottle of house wine in a local mid-range restaurant costs just £13 in France, compared to £20 in Britain.

Electricity in France is also significantly cheaper than in the UK, Spain, Cyprus and Portugal – with average weekly consumption costing less than half that of the UK.

…but Down Under it will cost more

Anyone looking to retire from the Sun Down Under will need a bigger budget – as costs tend to be higher than in Britain.

According to Property Guides, food, healthcare, furnishing your home, eating out and car rental cost more in Australia and New Zealand.

The average shopping basket in Australia costs an extra £13.14 per week, while treating yourself to a three-course meal at a local mid-range restaurant (excluding drinks) will cost you an extra £6.40, or £31.35, compared to the UK.

You would save on your fuel; 50 liters of unleaded petrol costs 40 percent less in Australia than in Britain: £46.50 versus £77.

However, these savings are not enough to outweigh other, higher costs, the report notes. It would cost you an extra £166 per year to fund your lifestyle in Australia.

And that’s before you factor in the state pension penalty. Anyone looking to move there should be aware that their UK state pension will be frozen from the moment they arrive in Australia.

The state pension rises every year in Britain at the highest rate of wage growth, inflation or 2.5 percent, under a policy called the triple lock. But unlike many European countries, this does not apply to countries abroad in Australia.

British pensioners’ state pensions have also been frozen for those living in New Zealand, Canada and South Africa.

According to official figures, more than 480,000 pensioners living abroad did not receive an increase in their state pension every year from March 2022. In total, 84 percent of them lived in Australia, Canada and New Zealand.

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