In 2017, Portugal topped Forbes’ list of the best countries in which to retire abroad. The ever-popular Algarve became the darling of the publishers’ writing about overseas retirement.
Even Americans, who traditionally focused on South and Latin American countries for retirement abroad, embraced Portugal, citing its “old-world” culture as one of the main attractions. For Portugal, this wasn’t a one-off success. It has long been rated in various publications as being among the top ten places for overseas retirement.
Live and Invest Overseas, for example, rated the country’s Algarve region as the No.1 retirement destination in the world for two years in a row, and International Living gave Portugal an 84.8 out of 100 in its 2015 index of the best places to retire.
Why Portugal is becoming more popular with expats
There is no secret. The three vital ingredients to its success are the weather, the lifestyle, and the government’s efforts to attract expats.
The result is that Portugal is growing rapidly in popularity among retirees and semi-retirees from all over the world. They come for famous Green Wine (Vinho Verde), beautifully sentimental Fado tunes, generous sun, and an opportunity to ease their tax burden.
In the attempt to make Portugal, and especially the Algarve, the “Florida of Europe”, the Portuguese government introduced a tax exemption on foreign occupational pensions.
As long as a pensioner qualifies for the 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.
Also, depending on the provisions of the applicable tax treaty, it is usually non-taxable in the source country for the duration of residence in Portugal – thus making it tax-free living for qualifying retirees.
Despite some criticism from EU politicians concerning Portugal’s tax policies, the country stands its ground on protecting the scheme and it seems to pay off: the Algarve and other regions are filling with happily retired Scandinavians, Britons and other nationals appreciating everything the country so generously offers them.
Indeed, the country has a lot to offer: it is in the EU jurisdiction and easily accessible from anywhere in Europe. The country is at the meeting point between three continents – Europe, Africa and America.
It has always been central to the most important international routes. International airports are all over the country – Lisbon, Faro and Porto have regular connections to major cities in the world.
Lisbon is just two and a half hours away from Paris and London by plane. For those who want to explore the country by car, there is a modern road network: it only takes two hours to get from Lisbon to Porto or Faro. Madrid is just six hours away.
Portugal is cheaper than Britain or most Scandinavian and western European countries, is ecologically clean and offers wonderful opportunities for a very healthy and inspirational lifestyle.
There is much more to living in Portugal than just this, but there are also some drawbacks, so let’s look closer at the pros and cons of living in Portugal.
The pros of living in Portugal
This bit is really easy, isn’t it? You can probably name a dozen or so positive changes that will happen to your life when you relocate to Portugal. The main advantages are as follows:
1. Amazing golf
Portugal is arguably home to some of the best golf courses in Europe.
If you are passionate about golf, and you have a fair amount of money put by to afford your annual fees and you are committed to spending your retirement on the greens, then Portugal should be your number one choice!
There are only 70 or so golf courses in the country, and the total number of golf club members is less than 20,000. But despite (or maybe thanks to) these modest numbers, the quality of golf courses is very high and the country’s popularity as a top golfing destination has been steadily growing.
The Algarve region alone counts more than 40 golf courses, many of them world-famous championship layouts.
Elsewhere you can play equally esteemed courses along the Lisbon coast, and even on beautiful Madeira Island, set in the Atlantic Ocean.
Whether you’re an experienced player or just a beginner, there’s a golf course in Portugal for everybody, with brilliant layouts where you can hone your skills, improve your game, and maybe even lower your handicap in the bargain.
2. The weather and climate
However obvious this upside of Portuguese life is, we cannot skip the weather topic. This is very often a primary reason for people to choose Portugal as their retirement destination, so we have to add at least a line or two to the common praise of Portuguese sunshine.
It is certainly something in the nation’s favour – it is very diverse. The further south you head, you’ll find hotter summers and more temperate winters.
If you like it seriously hot, head away from the Atlantic coastline and into the beautiful interior of the country; there you’ll find the summers are baking!
In warmer areas, such as the Guadiana river basin, summer highs can reach beyond 45 °C. In the north, on the other hand, snowfall is common, and winter temperatures can drop below −10.0 °C.
3. Brilliant surfing
Portugal has almost 500 miles (800 km) of coastline. Yet one of the lesser-known Portugal facts is just how good the country is as a surfing destination.
Indeed, Portugal is a surfer’s paradise. Knowledgeable people say the country boasts 364 days of surf.
In 2011 at Praia de Norte, a beach near the town of Nazaré, Hawaiian Garret McNamara broke records by surfing the biggest wave ever caught, which was an astonishing 90 ft. high! That’s nearly 27.5 meters!
If you are a devoted surfer or want to get into surfing, or your children and grandchildren love this kind of pastime – retire to Portugal and take advantage of its fantastic surfing opportunities.
4. Lower property prices
The property market in Portugal is undervalued and among the most affordable in Europe. On the whole, housing is cheaper to buy there and investors can make more money from rentals than in many other European countries.
The price of property away from the resorts and coast will surprise you even more. You can bag bargains in some stunning inland towns and villages and still only be a short drive from major urban areas and the beaches.
You will be looking at buying a more traditional property, rather than developed resort style homes, but you can certainly find affordable property if you hunt for it in Portugal.
5. Natural beauty
The coastline in Portugal is beautiful. As the country lies on the Atlantic and is sometimes lashed by dramatic storms in the winter, this has led to stunning rock and cliff formations on the coast.
For walk lovers, it is one of the best countries in the world to explore on foot. In the summertime the beautiful beaches all the way up the western edge of the nation are to be explored and enjoyed.
Away from the coast, Portugal is home to mountains and plains, national parks, lakes, olive groves and rivers – it is a geographically diverse and fabulous nation.
6. No stress lifestyle
The pace of life in Portugal is laid back, relaxed and unrushed.
It takes time to get used to it, but once you stop being annoyed at how long it takes for a simple task to be done, it is a dream come true.
Remember, there is nowhere to rush. Have a glass of port instead – it is such a healthier way to live.
7. Healthy food
Speaking about healthier living – nothing can be better for your health than Portuguese cuisine and eating habits.
The Portuguese are the biggest fish eaters per capita in Europe, and all kind and sort of fresh fish is available daily at the local markets. It explains the endless variety of seafood arriving in a traditional cataplana pan to your lunch table.
In addition, the abundance of sunshine in this part of the world means fruit and veg and other fresh produce is cheap and easily available.
8. Low crime
Portugal ranks as the 17th safest country in the world. Violent crime is rare, and petty crime is largely limited to street crime during the busy tourist season.
9. Low cost of living
The cost of living is lower than in the UK, and is among the lowest in Western Europe. In fact, it is on average 30 percent lower than any other country of the region.
A retired couple could live here comfortably but modestly on a budget of as little as 1,100 or 1,200 euros per month.
Living in Portugal means you can easily afford the lifestyle you are used to for less money and squirrel away the rest to build up your family wealth. Or, if you fancy, you can afford a much fancier lifestyle for the same money you spend in the UK and indulge in luxuries you have always wanted to try.
10. A wealth of culture and heritage
Culturally, Portugal is a rich country.
There is everything there to satisfy the most demanding minds – music, theatre, opera, arts, architecture, numerous festivals and shows, museum exhibitions and cultural events all year round. It is simply impossible to get bored while living in Portugal.
11. A very stimulating environment
Portugal a brilliant country for both an active or a more contemplative retirement.
The coast is a perfect place for those who love all kinds of water sports; the country is full of wonderful walks; the scenery is amazing; and from the north to the south, the diversity of the landscape will reward a devoted explorer with the most stunning views.
It is the country that will make you want to try something new: take up photography, research wines in theory and in practice, try fishing or learn to play the guitar.
In short, it is a truly inspirational place where it is easy to keep your mind and body healthy and engaged.
These are the most common and obvious advantages of living in Portugal in retirement.
Those who have a long-lasting love affair with Portugal and know the country well can probably expand this list to the infinity, citing such details as friendly people, excellent healthcare, famous vinho do Porto (port) and amazing vintage Madeira, unprecedented sunsets from Cape Saint Vincent and the most delicious pastel de natas (custard cakes) in the world.
There is a lot to fall in love with in Portugal, and everyone finds their own bright sides about living there. However, when choosing your retirement location, it is really vital to look at the possible negative sides of the country you are planning to retire to.
It’s good to know the negatives beforehand – it gives you a chance to decide whether you are prepared to live with them and whether they might become too big an annoyance in your life.
Now to a more challenging side of Portugal’s life:
The cons of living in Portugal
1. There is no rush to do anything
Remember the advantage of the slower pace of life that we mentioned earlier? Well, with this comes one of the biggest challenges every foreigner relocating to the Mediterranean has to face at some point.
Initially, for those coming from fast-paced and stressed out countries like the UK, it feels like a nightmare because it can take so long to do anything.
Queues in banks can stretch for miles as the staff chat about anything and everything with their customers, and customers chat among themselves.
Two cars can stop on a narrow country road side by side, and the drivers will discuss their family affairs while other cars are waiting patiently behind them.
As we said before – get used to it and enjoy! No point getting stressed out, just accept this is how your life is now. This is where the next point comes in: Fado Culture.
2. Portuguese fatalism or Fado culture
Those melancholic and mournful tunes of Fado music reflect the whole approach to life in Portugal – an attitude in music, literature and even the way the Portuguese speak.
It is characterized by melancholy, resignation and a belief in capricious fate. In short – don’t put up too much of a fight, as it’s probably wiser to go with the flow and submit to your fate.
The Portuguese say oxalá, meaning “hopefully/if only”, which is the very expression of Fado culture.
Oxalá comes from the Arabic inshallah, meaning “God willing”, which probably settled in the Portuguese language when the Umayyad Muslims invaded from the south of the country in 711, making Portugal a part of its Caliphate for well over 5 centuries.
Living in Portugal means accepting Fado culture and enjoying what you have.
You can, of course, make plans and undertake some actions to implement them, but don’t overexert yourself or any local trades involved in your plans, and don’t worry too much – things will work out themselves, oxala!
3. The language
The most difficult thing about Portugal is the language. It really is a very complicated and difficult language to learn and many people struggle to get much further than the basics and every day pleasantries.
If you live in the more urban and populous areas where there are lots of expats, international citizens and professional Portuguese, you will find English quite widely spoken. The Algarve, for example, is being anglicised rapidly thanks to international expats.
However, if you make an effort and do advance your language skills beyond simple a shopping routine, the reward will be immense – from great local respect, to building local friendships, to being accepted as a full member of local community.
4. The red tape
The bureaucracy in Portugal is quite something else. There are reams of paperwork and hours of standing in queues just to achieve the most basic of tasks, and this can really grate.
However, if you prepare yourself for this fact before you attempt to do anything – from taxing your car to getting a new bank account for example – you will be alright.
Just don’t attempt to rush and don’t stress when things take time. Embrace the Portuguese system and go with the flow, otherwise you will drive yourself crazy.
Driving styles of the locals in Portugal will shock you at first. But as many expats will advise you wisely, “you will soon get used to it.” Watch out for your first month or so and don’t get stressed out, whatever happens.
Other than that, Portugal is a fantastic nation to consider as your retirement destination – it really does offer a great quality of life and a lot more on top. The general pace and consequent slow approach to life are common to the whole Mediterranean culture, whatever country you choose. It’s not a downside, it is just part of a healthier lifestyle.
You might find useful:
- UK Pensions And Tax In Portugal – what pension options you have and how to pay no income tax on your pension when you retire to Portugal;
- Best Places To Live In Portugal – a detailed overview of Portugal’s most popular locations for expats;
- Visit our homepage for a comprehensive range of Retirement Abroad guides.