The cheapest countries for Brits to live 2024

Heading off to Spain or Italy could mean you save money, as well as enjoy better weather.

If you’ve ever considered living abroad, then there’s a lot to consider.

The expat community will be a factor for some ‒ just because you are no longer in the UK doesn’t necessarily mean you don’t want to be around fellow Brits.

The weather, the language and the food will all play a part in the decision too.

But perhaps the most crucial element will be the cost.

After all, living costs can be substantially different in other countries, which can be good ‒ or bad ‒ news for your savings.

So if you’re thinking about moving abroad, whether for work or your retirement, which countries are going to be the most cost-effective options?

The cheapest countries for expats

That’s what new analysis from Property Guides looks to establish.

The study from Property Guides dug into how much a host of different types of expenditure will set you back in a range of destinations popular among expats.

These cover the likes of groceries, healthcare, leisure and travel.

According to the analysis from Property Guides, these particular spends cost around £1,996 in the UK, but are noticeably cheaper in a host of those expat locations.

Let’s take a look at the countries pinpointed as being cheaper to live in than the UK:

The study found that Spain was a whopping £700 a year less costly than the UK, effectively a third less than you would spend for those same activities and items over here.

One area that Spain particularly excelled was in energy costs, where the cost of electricity was found to be significantly lower than in the UK.

Combine that with the fact that the weather is so much better generally, and you’ll find that certain household bills are far lower if you opt to move to Spain. 

Grocery shopping was also far more palatable, with the same basket of goods coming to almost £28 less than in the UK.

With the rocketing price of food in the UK over the last few years, the prospect of sorting out your supermarket shopping at such a discount is always going to appeal.

Italy took second place, performing well on things like home running costs (covering energy, furniture and electricals and a cleaner) as well as groceries and leisure.

When it comes to travelling, it’s worth noting that fuel was costliest in France and cheapest in the USA, while train travel was found to be significantly cheaper in Portugal than any of the other countries included in the study. 

Higher costs from moving abroad

There are some locations popular with expats which tend to be more costly to live in than the UK.

Living in Australia works out to about £166 a year more costly, while in New Zealand you’ll have to pay about £310 a year more.

In Australia, you’ll face a higher grocery bill for example, while eating in a restaurant is more costly too, though fuel costs are around 40% lower.

Of course, the counter to that is that you’ll enjoy a much warmer climate, while also not needing to learn another language.

What happens to my State Pension?

Heading overseas for your retirement is always going to be tempting, particularly if you can combine a better climate with lower living costs.

However, it’s also crucial to bear in mind that retiring abroad will have an impact on the size of the State Pension that you will receive.

While you live in the UK, your State Pension will increase each year thanks to the triple lock.

This means an annual rise by the largest of either 2.5%, the rate of wage growth or the rate of inflation.

The triple lock also applies if you retire to certain nations, meaning that even once you’ve left the UK your State Pension will grow in size each year.

These include nations in the European Economic Area (EEA), Gibraltar, Switzerland, and countries with a social security agreement with the UK.

There are exceptions though. You won’t get any increases if you move to Canada, New Zealand or Australia, among other nations.

That means the size of your State Pension is frozen at the level it was at when you left the UK.

As a result, as costs grow in the nation in which you’ve set up home ‒ and they will ‒ your income will become ever more stretched in trying to deal with those increased bills.