Can Brits Still Afford To Move Or Retire To The Sun?
Now the UK has left the EU, work permits in Spain are more difficult to obtain and if you plan to retire to Spain you have to get a visa and demonstrate that you can financially support yourself. These more onerous requirements have ended the dreams of those who had planned to move or retire to the sun in Spain and live on their state pension. Some may need to look at Portugal or France where the requirements are not as high.
In order to retire to countries in the EU now that the UK is no longer a member it is necessary to apply for a visa. If you are thinking about moving to Spain and do not intend to work there, the most appropriate of these is the Non Lucrative Visa (NLV), which allows you to take up residence in Spain provided you have sufficient funds to support yourself and do not need to work in Spain. It is this requirement that is causing problems for many Brits. In 2023 you have to demonstrate an income of €36,000 a year for a couple and €50,400 for a family of four. This requirement will rule out the option of moving to Spain for many. Those who are retiring on a basic UK State pension which is £10,600 in 2023 will not qualify.
Younger families looking to move to Spain will generally have to look to get a work permit or a visa allowing them to set up a business as they would have to demonstrate an income of €50,400 from sources other than work to qualify for an NLV.
However, all is not lost if you want to retire to the sun. Portugal offers similar benefits of climate, lifestyle and low cost of living. Portugal has a similar visa to Spain’s NLV, the Passive Income Visa, which has a significantly lower annual income requirement (€13,680 for a couple and €19,152 for a family of four in 2023). The visa also does not restrict you from working or setting up a business as the Spanish NLV does. The cost of property and the cost of living is around 10% lower than in Spain and the icing on the cake is that you also have the potential benefit of the Non-Habitual Resident Scheme which will allow you to pay only 10% tax on a UK pension and no tax on some other sources of income (see the article Save Tax With Portugal’s Non-Habitual Resident Scheme for more details).
France also has a lower income requirement for its residential visa (€14,772 for a couple and €17,724 for a family of four). France, however, has higher property costs and a rather higher cost of living than both Spain and Portugal.
This table summarises the different property and living costs between the three countries:
|Price of a 200 sq metre apartment outside city centre*||€391,728||€334,964||€759,224|
|Average price of new dwellings per sqm**||€2,398||€1,162||€4,523|
|Average price of older dwellings per sqm**||€1,531||€1,023||€3,414|
|Rent 3-bedroom apartment*||€757||€723||€956|
|Monthly Utilities – (Electricity, Heating, Cooling, Water, Garbage) for 85m2 Apartment *||€137.85||€120.18||€177.15|
|Monthly Internet (60 Mbps +, Unlimited Data, Cable/ADSL)*||€46.97||€39.03||€32.86|
|International Primary School, Yearly – 1 Child *||€8,658||€8,496||€12,970|
|Meal for two in a mid-range restaurant*||€47.48||€35.61||€59.35|
|Bottle of wine (mid-range)*||€5.94||€4.75||€8.31|
|Beef Round (1 kg)*||€12.31||€10.85||€19.65|
|Chicken fillets (1 kg)*||€7.09||€5.87||€12.24|
|Cost of living plus rent index*||42.13||38.27||55.38|
* Figures per Numbeo.com on 7/4/21 ** Per Property Index: Overview of Residential Markets – July 2020
Overall the cost of living taking account of the cost of rent is 24% lower in Spain than France. Portugal is 30% lower than France.
So, if you want to move to the sun, but only have limited income you may need to look at Portugal rather than Spain. France could also be an option but you would need to consider the higher property and living costs in France.
On November 5th 2022 we will be holding a Retire Abroad Roadshow. To find out more and to book your tickets follow this link:
If you are considering a move to Spain or Portugal you can watch the recordings of our recent webinar series:
You may also find these articles useful:
- Spain’s Non-Lucrative Visa: A Good Option For Those Retiring To Spain
- Spanish Golden Visa – Buy Property To Gain Flexible Residence In Spain
- Use Portugal’s D7 Passive Income Visa To Retire To The Sun
- A Guide to Portugal’s Golden Visa