Each year, the Expatra team reviews the most popular overseas retirement destinations for Britons. They include EU retirement hot spots (the Mediterranean, Adriatic and Black Sea countries as well as Central Europe), the Brits’ beloved Down Under and a few exotic locations, such as Thailand, Panama, Costa Rica and Malaysia.
Once we factored in accessibility, common financial regulations and healthcare for retirees, the EU countries still stand out as the best countries for retired Britons.
Our review is based on the following criteria:
- residency requirements
- travel links to the UK (to visit family)
- the need to learn the local language(s)
- country stability factor (based on the Fragile States Index by Fund for Peace)
- cost of living
- property prices
- income taxes applicable to retirees and/ or special retirement income regimes
- whether UK pensioners have access to a public healthcare system
- quality of public healthcare (based on the Lancet Medical Journal)
- cost of a basic private health plan for a 55-year-old couple
These are the final seven we think Britons should be looking at.
Note: When it comes to pensions, taxes and asset protection, the laws and rules are complicated. The information on taxes and pensions in this guide does not constitute financial advice and should not be taken as such. We highly recommend you to obtain professional advice from a qualified tax planner and an international financial adviser.
Table of Contents
7. Germany: A superb quality of life
Germany is an ideal retirement destination for those who don’t put a Mediterranean climate and easy access to beaches as a priority in retirement.
Retirees who choose Germany relish in the amazing nature with woods and forest that goes on forever, modern cities that cater to every need and cuisine that often far exceeds expectations.
You’ll enjoy diversity with a high quality of life and stability that only Germany can deliver.
As EU citizens (at least for now) all Britons need to do in order to reside lawfully in Germany is to register at the Einwohnermeldeamt (resident registration office) in their first few weeks of arrival.
For this, you will need your passport, proof of address, health insurance and receipt of a pension.
Germans are pretty good at speaking English. However, if you want to truly become a part of the community – learn German. It’s not such a difficult language for an English speaker to learn and you will enjoy the benefits straight away.
Travelling between the UK and Germany is easy and fast. If you don’t fancy the hassle of plane trips, you can easily drive over and take an overnight ferry.
Potential financial gains
Living in Germany is approximately 20 percent cheaper than in the UK including rent.
Property prices, as always, depend on locations. Munich, for example, named the most livable city in the world by Forbes (and justly so), is very expensive with an average price for a square metre in the centre reaching over €10,000.
Berlin keeps on par with the country’s average, so you can buy a central property there for about €5,650 per square metre.
Smaller towns are cheaper and often more peaceful and beautiful.
Pensions & income taxes
When it comes to taxes, the advantages of retiring to Germany are not so pronounced. You have three options, all result in the same up to 45 percent taxation in Germany:
- You can leave your pension pot in the UK. According to the DTA (Double Taxation Agreement) between the UK and Germany, your pension income will be taxed in Germany up to 45 percent when you become a German tax resident. Your pension pot will also be subject to UK death benefit charges.
- Transfer your pension pot to Gibraltar QROPS. You will pay 2.5 percent tax in Gibraltar and up to 45 percent in Germany as a German tax resident (with tax credit applied to mitigate the Gibraltar tax). The advantage is protection from UK inheritance tax and death benefit charges when certain conditions are met.
- You can use Malta QROPS. This will mean paying up to 45 percent of German tax and protection from UK inheritance tax and death charges when certain conditions are met.
German taxation is complicated and difficult to understand and the above options for your pension are generic.
Your best bet would be to consult both an international financial adviser and an international tax specialist to understand your best options.
UK citizens in receipt of a state pension and with an S1 form can access healthcare in Germany for free or at reduced rates. You will find all the details on S1 form in the Healthcare Section of this guide.
With the S1 form, you can register with German health insurance scheme (GKV).
With GKV you can access primary care with registered doctors, hospital care (both in- and outpatient) and basic dental treatment. It covers most of the treatments, however, you might have to pay a little extra for prescriptions, glasses, dentures and the like. It is generally affordable.
You are also eligible for free treatment back in the UK.
You can have a private health plan (PKV) from a German provider (no international providers are acceptable for permanent residents).
Private health plans cover a wider choice of medical and dental treatment and ensure a higher level of service. You can also choose a doctor who speaks English. A significant part of private medical insurance premiums can be tax-deductible from German income taxes.
Depending on your age and health a private healthcare plan for a couple can start from as little as €360 (£325) a month.
6. Italy: La dolce vita in the Mediterranean
Italy is gaining in popularity as a retirement destination with foreigners, including Britons. Italy’s gorgeous Sardinia and Tuscany are magnets for international retirees looking for their share of la dolce vita in retirement.
For now, getting residency in Italy is a simple process and Britons don’t need special permission to reside in Italy. All they need to do is to apply for a certificato di residenza (residence certificate) at their local Anagrafe (registry office).
Travelwise Italy is easily accessible from the UK. Budget airlines are cheap, and you can even take a train and travel from London to Italy in a single day if you prefer not to fly. Driving is also an option but you’d need to plan in an overnight stop.
Knowing Italian is pretty much a must if you want to navigate day-to-day life in Italy and truly make Italy your new home.
Potential financial gains
Popular retirement areas in Italy are not the cheapest places to live, but when it comes to housing, Britons on average do find it affordable. To buy a property in Tuscany, for example, will cost you on average €2,300 (£2,060) per square metre.
You might find that grocery shopping in Italy is slightly more expensive than in the UK. Eating out is about four percent more expensive than the EU average. Alcohol is cheap, and so is public transport.
Pensions & income taxes
Italy offers a great tax discount for expat retirees: if you retire to Italy, you will pay seven percent tax on your pension income for the first six years of residency. However, after your six-year tax-free residency expires, you are liable for income tax at Italian rates ranging from 23% on income up to €15,000 (£13,500) to 43% on income over €75,000.
Just like with Germany, there is a QROPS solution available when you retire to Italy. You can use either a Gibraltar or Malta QROPS. If you use Malta your pension will be paid out gross with no tax deducted and 100% of your pension pot can be paid out as a lump sum to your family upon death.
Public healthcare in Italy is of good quality. If you are in receipt of the UK state pension and have an S1 form, you are free to use Italian public healthcare at the same level as any local person.
To be able to do this you will need to apply for a healthcare card – the tessera sanitaria. You will use it each time that you see the doctor, buy medicine in a pharmacy, books an examination in a laboratory, or visit a specialist in hospital and ASL (azienda sanitaria locale or local health unit).
If you are aged from 55 to about 65, you will find local private healthcare quite affordable. A basic private top-up plan for a couple can start from as low as €60 (£55) a month.
5. France: Right on the doorstep
France, Greece and Andorra all scored equally to vie as contenders for our fifth place. However, Italy and Greece come lower in the stability index, while Andorra requires foreign retirees to prove their annual income reaches three times Andorra’s minimum wage – €28,000 (£25,100). Hence France takes the fifth spot.
For many Britons, France sits high on the retirement abroad bucket list. It is within touching distance of the UK, yet so very different (and, many would argue, so much more appealing) on almost every level…
Retiring to France couldn’t really be easier: it is right on our doorstep, and Britons can move there to live in retirement with minimal fuss. The country feels very familiar to most because of holidays and weekend trips over the years.
There is no residency requirement for Brits – at least, not for now. However, it’s wise to apply for a residence permit (carte de séjour).
It’s optional since an EU passport is sufficient to reside in France, but it may become very important the moment your British passport stops being an EU passport.
The carte de séjour also provides proof to HMRC that you are permanently residing in France, which is important for establishing your tax residency (more on this in Section II: Becoming UK non-resident for tax purposes).
France is probably the easiest destination for Brits when it comes to travelling. Both ferry and plane take about 1.5 hours and a high-speed Eurostar takes you from London to Paris in under 2.5 hours.
However, there is a language barrier. Oui, they really do speak French in France… and will indicate that they prefer to be spoken to in French, too.
To integrate successfully in France, you do need to speak French. You won’t be sorry though, if you make the effort to learn the language, France will become a home you’ll love.. It’s easy to access lessons online (check out the Duolingo app) or through the local library or the nearest college to you.
Potential financial gains
On average, France is just seven percent cheaper than the UK, so there’s no great gain here. It can also be expensive when it comes to buying a property, however, bargains can always be found, especially if you don’t mind a spot of DIY or engaging a builder to help make your home perfect.
In general, it all depends on your preferred location, much like UK prices vary depending on where you choose to live.
For example, renting a three-bedroom apartment in the centre of the popular retirement city of Toulouse will cost you about €1,090 (£980) a month. If you want to buy, you will pay about €3,640 (£3,270) per square metre.
And there are still some bargains to be had if you love rural France. You can buy an old house in need of renovation for about €55,000 (£50,000) or less, and turn it into your perfect pad in the sun.
Pension & income taxes
If you retiree to France as an expat, you can take your pension pot in one lump sum and pay just 7.5 percent tax, with a 10-percent tax-free allowance. This will only work for lump sums: any regular income will be taxed at a higher level.
You can optimise your taxes by transferring your pension into a Qualifying Recognised Overseas Pension Scheme (QROPS) in a low-tax jurisdiction (for example Malta).
It won’t make much difference when it comes to French income taxes. It will, however, if done properly, protect your family assets from both French and UK inheritance taxes.
At first glance, France looks like a high-taxation country. However, with all the allowances, discounts and reductions available, a retired couple would not pay any income tax in 2019 if their net taxable income in 2018 had not gone over €27,974 (£25,000). Above that, it would be just 14 percent on up to €73,000 (£65,500).
That said, tax calculations are very complex in France; the above numbers are purely for illustration purposes. When it comes to your pension and tax liabilities, do seek professional advice.
All UK retirees permanently residing in France and receiving state pensions from the UK are entitled to state health insurance in France. For this, you will need to apply for an S1 (certificate of entitlement to healthcare) form from your country of citizenship before you leave.
The majority of your medical costs will be reimbursed through state insurance in France. You can usually expect a reimbursement in the region of 70 percent for visiting a doctor, dentist or specialist, around 80 percent of hospital costs and up to 100 percent of prescribed medications.
The rest of the medical fees have to be covered by the patient. If you are over 65, almost all of your costs will be reimbursed through state health insurance.
If you worry about the gap, you can choose to top up your health cover with a private health insurance policy, known as a mutuelle.
Most mutuelles will cover the remaining 30 percent of your general healthcare costs, including emergency hospital treatment.
The basic plan for a couple can start from as low as €80 (£72) per month; however, it does depend on your age and current health.
Mutuelles do not guarantee faster treatment or access to private doctors. They simply pay for what the national French healthcare insurance does not.
Another option is an international health insurance plan, but that will cost quite a bit. The most basic cover from the International Medical Group (IMG), for a couple aged between 60 and 65, starts from €840 (£750) a month.
For more detail on French retirement, read our Retire to France page.
4. Malta: A sense of familiarity
In 2015 Malta topped the Telegraph’s list of the 10 best countries for Britons to retire abroad.
The fact that Malta is so popular with expats and retirees, especially Britons, doesn’t come as a surprise considering the country’s beautiful climate, its historic connections with the UK and its proximity to the continent.
As a former UK colony, Malta has a great sense of familiarity for Brits.
Maltese and English are both official languages and about 88 percent of the population speaks English. With three-pin plugs and even Arriva buses in Malta, it makes life much easier for British expats.
Just as in the other EU countries, you don’t need any official permission to retire to Malta. Registering your residency as quick as possible is a good idea, considering Brexit.
Malta is easily accessible from any major British airport, be it London, Liverpool, Manchester, Birmingham, Nottingham or Cardiff. Flights are offered by a vast number of airlines including British Airways, Ryanair, Air Malta and EasyJet, which keeps prices competitive.
Potential financial gains
In general, it is less expensive to live in Malta compared to the UK. However, being an island, Malta has to import a lot of goods, making certain products more costly.
You won’t feel that there is a significant difference in rent or restaurant prices between Malta and the UK. But fresh farm produce in the markets can be more expensive in Malta.
Transport, petrol and basic utilities are cheaper, and so is alcohol – even imported.
When it comes to property, some sought-after areas can be expensive, however, they’ll still feel quite affordable compared to many regions in the UK.
You can buy a beautiful two-bedroom townhouse in one of the most expensive locations – Cospicua (the Grand Harbour) – for just under £300,000. A two-bedroom apartment in St Paul’s Bay (another popular, but not as upmarket, location) will cost around £140,000.
Pension & income taxes
Malta offers expat retirees a favourable tax treatment under its Retirement Programme: they pay a flat rate of 15 percent on any income they remit to Malta.
Under the double taxation agreement, UK citizens residing in Malta have their pension taxed in Malta, not in the UK.
It means that your UK pension will be taxed in Malta at a rate of 15 percent, provided that you hold a Maltese Permanent Residence Permit.
You don’t have to remit all your pension income. So take what you need and, if you keep the rest out of the country, that pot won’t be taxed at all.
Malta’s public healthcare system is free at the point of delivery for all Maltese residents. With an S1 form, any British citizen who receives a UK state pension is entitled to the same level of public healthcare as locals.
As a retiree, you are also entitled to free treatment back in the UK if you so choose.
Public healthcare covers most medical services, including specialist treatment, hospitalisation, prescriptions and rehabilitation.
You can opt for private cover from a local provider; depending on your age and health, it will cost from €80 (£72) a month for a couple.
However, for those aged 65+ it can be difficult to get local cover and you will have to opt for an international insurer, which is costly.
Pay-as-you-go is an affordable option. A standard visit to the doctor might cost €10-15 (£9-14) and a specialist appointment not much more than €60 (£54). Hospitalisation, however, can make bills mount up fast. So it’s worth planning what you want to cover and what you can afford out-of-pocket when you choose a private plan.
3. Cyprus: Our top destination for financial benefits
Cyprus’ sunny weather, historical and cultural ties with the UK, as well as a lenient fiscal policy for expats, makes it a very attractive destination to retire.
As a former colony, Cyprus feels like home for Britons both culturally and language-wise. Greek and Turkish are the two official languages in Cyprus, but English is spoken all over the island. There’s really no need to learn the local languages unless you want to.
Brits are welcomed to the island and there are plenty of them, so you will never be short of homegrown company.
The residency requirements are the same as in the rest of the EU – just register after three months to make sure you have the correct paperwork to qualify for everything that locals are entitled to.
Cyprus is a 4.5-hour flight away from the UK. Although there are cheap flights available, as an island, Cyprus is more restricted in terms of travelling than the other countries on our list.
Potential financial gains
Cyprus rocks when it comes to financial gains.
On average, the cost of living in Cyprus is 31 percent lower than in the UK. However, imported goods – including clothes and shoes and some fresh produce from the markets – are more expensive. A good reason to visit the UK occasionally.
The average property price per square metre in Cyprus is just under €1,700 (£1,530). The popular retirement destination of Paphos and other, smaller coastal spots are even cheaper.
For £300,000 you can buy a stunning three-bedroom villa in Coral Bay, Paphos, with a sea view and within walking distance of the beach.
If you are after a flat, £100,000 will buy you a three-bedroom apartment in a residential area of Paphos.
Pensions & income taxes
The Republic of Cyprus has a taxation treaty with the UK, under which British pensioners residing in Cyprus have their pension taxed in Cyprus, not the UK.
As a Cyprus tax resident you have two options:
- Pay a fixed tax rate of five percent per year on your pension income
- Opt for Cyprus’ tiered income tax system.
The top rate in the tiered system is 30 percent, but an annual personal tax allowance is quite high, with the first €19,500 (£17,490) of income tax-free. So if your income is below or equal to a personal tax allowance, it makes sense to opt for the tiered system and live tax-free.
You can alternate between options 1 and 2 depending on which is better for you in a particular year.
You can also seek advice from an international financial advisor about transferring your pension into QROPS and potentially living tax-free. This will also offer protection for your family assets.
As a UK citizen in receipt of a state pension, you are entitled to obtain essential medical treatment in government hospitals in Cyprus with an S1 form.
If you don’t have an S1 form, pay-as-you-go is not very expensive. Visiting a doctor can cost from €30 – €50 (£27-45) and X-rays will cost approximately €50 (£45).
Private medical insurance can also be relatively inexpensive, although that is heavily dependent on age. Cypriot residents under 65 (whether Cypriot or not) can pay as little as €400 (£360) per year for private health cover.
This, however, might change very soon.
Cyprus’ healthcare is undergoing a major change right now, with a new National Health Scheme (Gesy) being introduced in 2019-2020.
Gesy is a universal healthcare system based on contributions from the residents, which is free to users (with small co-payments for certain services), subject to an annual cap. It will be fully operational in June 2020, when both in-patient and out-patient care will be covered.
In Cyprus, retirees pay 1.7 percent in 2019 (transitional rates) in National Health Insurance System (NHIS) contributions on pensions, with tax capped on incomes above €180,000 (£161,440). From March 2020, the percentage rises to the full rate of 2.65 percent.
Healthcare benefits will cover a standardised basket of medical services, including hospitalisation, surgery, pharmaceuticals, general and specialist medical care and laboratory services.
2. Portugal: Cheapest among our best retirement destinations
In 2017, Portugal topped the Forbes’ list of the best countries to retire abroad. The country is a mix of everything we usually seek in retirement – a great lifestyle and healthy climate yet not a hinterland, good infrastructure, health services and plenty of activities – and it all comes at a reduced cost.
Just as in the rest of the EU, if you wish to retire to Portugal all you have to do is to move. There are no special requirements for British citizens to gain residency, whether permanent or temporary. However, doing this is a good idea because of Brexit.
Portugal is well-connected. There are international airports all over the country: Lisbon, Faro and Porto have regular connections to major cities worldwide.
Lisbon is just 2.5 hours from Paris and London by plane. It only takes two hours to drive from Lisbon to Porto or Faro, and Madrid is just six hours away.
Portuguese is a difficult language to learn, though. If you live in more urban areas, where there are lots of expats, you will find English quite widely spoken. The Algarve, for example, is being anglicised rapidly thanks to international expats.
Living outside the Algarve means you do need to speak the lingo. If you advance your language skills beyond simple shopping terms, the rewards will be immense – you’ll gain respect, build local friendships more readily and are much more likely to be accepted as a full member of the local community.
Potential financial gains
Of our five top retirement destinations, Portugal is the cheapest. On average, life in Portugal is 34 percent cheaper than in the UK, including rent.
The same is true of property prices. However, unlike Spain and France (where expats’ favourite retirement destinations are scattered), in Portugal, they are mostly concentrated around Lisbon and the Algarve – the most expensive regions.
When it comes to property, the Algarve can look quite pricey compared to the rest of the country.
An average two-bedroom apartment on the Algarve coast costs at least two or three times as much as in central Lisbon or Porto. Still, £300,000 will buy you a wonderful three-bed villa in a gated community, with access to a swimming pool and a five-minute walk from the beach.
So, however expensive it is in the Algarve, it’s still very much affordable by UK standards.
Pension & income taxes
The Portuguese government offers global retirees a 10-year exemption from income tax on foreign occupational pensions.
As long as a pensioner qualifies for a special expat pension tax regime for non-habitual residents, and the pension is an occupational pension, paid from a foreign source, the pension is not taxed in Portugal.
When you retire to Portugal and become a non-habitual resident there, your pension will be taxable in Portugal according to the double taxation agreement (DTA) between the UK and Portugal. However, under Portugal’s non-habitual regime (NHR), for the first 10 years, Portugal won’t tax your pension. In short, you will have 10 years of tax-free living.
The result is that Portugal is growing rapidly in popularity among retirees and the semi-retired from all around the world. The Algarve and other regions are filling with happily retired Scandinavians, Britons and other nationals appreciating everything the country so generously offers.
Portugal has a comprehensive free public healthcare system, ranked 12th in the world by the World Health Organisation.
If you are receiving a UK state pension, you can access the Portuguese public healthcare at the same level as the locals – you will need to obtain an S1 form.
Portuguese public healthcare system covers general and specialist care. Certain medicines are also available under the national health system at a discounted rate. For example, if you are over 65, you will pay just 10 percent of the prescription costs.
The coverage under public healthcare is pretty comprehensive. In addition to basic healthcare (general practitioners and specialists, maternity, hospital care, nursing care, prevention/ diagnosis, treatment and prosthetics), it also covers ophthalmology, dentistry, orthodontics and mental health.
It is a part-payment system, so most people must pay nominal fees (usually just a few euros) for GP visits and a little more for X-rays and scans. When you reach the age of 65, almost every service is free.
You are also entitled to free treatment in the UK.
Taking out private health cover in retirement is expensive, as not many local providers cater for 65+. For many, the only option will be international insurers.
As an example, a quick quote from Bupa Global Worldwide Health Options Plan (including dental and optical treatment, with zero deductibles) for a couple aged over 65 costs €2,700 (£2,420) a month.
1. Spain: Britons’ favourite retirement spot
Despite Brexit fears and economic concerns, our favourite European retirement destination maintains its appeal – thanks to its proximity to the UK, climate, lifestyle and sense of familiarity, Spain remains the firm favourite for Britons who retire abroad.
For now there are no requirements for British citizens to retire to Spain, although there is some paperwork to do to make your residency official – a wise step to take while post Brexit uncertainty exists.
Spain is just a short flight from family and friends. On average it takes two to three hours to get almost anywhere in Spain and you can drive there too.
There is a big British expat community in Spain which means that, although you will definitely benefit from learning Spanish, there is no huge driver to become proficient or to learn it as soon as possible. There are enough English speakers around to manage your day-to-day life to start.
However, if you want to feel truly part of the community, you have to learn Spanish. Knowing Spanish will also help immensely if you use the Spanish national health service, as not many public Spanish doctors or nurses speak fluent English.
The cost of living in Spain is much lower than in the UK. On average, it will cost you 28 percent less to live in Spain than in the UK, including rent.
As an example, to rent a furnished apartment of 85 square metres in the most expensive area of Malaga (a hot spot for British retirees) – will cost you about €950 a month (£860).
If you are planning to buy your own home in Spain, the average price per square metre is about €4,978 (£4,470), even when expensive cities such as Madrid, Barcelona and Bilbao are thrown into the mix.
Our favourite Spanish retirement destinations tend to be a bit cheaper. If you are after an apartment in Malaga, for example, you will be looking at a price of around €2,750 (£2,470) per square metre in the centre.
Pensions & income tax
When you become a tax resident in Spain, your pension income is taxed in Spain (not the UK) at Spanish income tax rates, under the double taxation agreement between Spain and the UK.
You can reduce your taxes considerably if your pension can be taxed in Spain as a purchased annuity. In this case, only part of the income is taxable, under certain conditions – which are quite complex.
As one example, if you start drawing pension income qualifying as a purchased annuity between the ages of 60 and 65, 76 percent of it is tax-free.
To do this, your pension would be transferred to QROPS (in either Gibraltar or Malta). There may also be additional benefits, such as accessing a bigger tax-free lump sum, protecting your assets from UK inheritance tax and gaining access to a wider variety of investment options.
Do remember to consult a tax professional and a qualified financial adviser when it comes to your pension, though.
The Spanish national health system is ranked seventh in the world by the World Health Organisation.
If you are a UK citizen receiving a UK state pension who has retired in Spain, you can use the Spanish system (the Sistema Nacional de Salud or SNS) and get the same treatment as locals.
For this, you will need an S1 form. Once you have registered it in Spain, you will also be entitled to return to the UK to receive free treatment if you prefer.
Spanish public healthcare is free at the point of use. If you have surgery, an overnight stay at a hospital or receive extensive prescriptions, you will be charged a reasonable fee. You may want to get a top-up plan to cover such expenses.
However, many expats choose to have private health cover to avoid long waiting periods and ensure that the specialists they see speak good English.
If you are looking for a private healthcare plan, the choice of local providers is ample. You will most certainly find something suitable for a reasonable price. As an example, Sanitas’ basic health plan for a retired couple starts from €138 (£124) a month.
For more detail on Spanish retirement, read our Retire to Spain page.
Hopefully the above list of our current top seven favourite places to retire abroad will give you some ideas and some new places to explore and research.
If you are considering retiring abroad, make sure that your planning covers every important aspect of your relocation such as your pension options, healthcare, how to make sure you are not taxed twice, removals, paperwork in your new country and so on.
It sounds like a lot of time-consuming work, that’s why we have done the research for you and put all the information together in our free to download Retirement Abroad Guide.