Next steps: how to retire to Spain or Portugal

Brexit hasn’t put an end to the idea of moving to somewhere warmer and sunnier to enjoy the free time that retirement brings. Here we look into how Britons can continue to relocate to Spain and Portugal

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The exact figure is unknown but approximately 1.2m Britons live in Europe—excluding Ireland, the vast majority in sunny, southern Mediterranean countries. Of that figure, 466,920 are pensioners, according to the Department for Work & Pensions. Last year, a certain number of those began to get cold feet about living in the EU after Brexit, but the numbers returning to the UK have so far remained low.

Spain and Portugal have long been two of the most popular destinations for Britons wishing to retire overseas. Even after December 31 this year when we become non-EU citizens, Britons’ rights to buy property remain unaffected by Brexit although they might require visas for longer stays in future. For the moment, thanks to the agreement already in place between the UK and all 27 EU members, British retirees will be entitled to reside, receive healthcare (which is free for those over 65 in Spain) and their UK state pension across Europe provided they are in-country before December 31.

Aside from the more reliable sunshine and warmer weather which often leads to a healthier outdoors lifestyle, the other main attraction to moving to Spain or Portugal is that the cost of living remains cheaper when compared with that of the UK—this is not the case in France or Cyprus, for instance.

In a report published last year, anyone retiring to Spain with a nest egg of €1.1m could live (albeit fairly modestly) for over 40 years without running out of money. The majority of British choosing to settle and buy a property on one of the many attractive coastlines including the Costa Blanca, Costa del Sol and Balearic Islands where English is more widely spoken than central or rural areas. Once there, many monthly outgoings such as the Spanish equivalent to Council Tax and the overall cost of eating out are considerably lower than in the UK.

Portugal is one of three European countries where that same pension pot would last even longer (the others are Greece and Poland). The southern region of the Algarve is one of the most popular destinations for retirees in Portugal where the majority of the estimated 50,000 British pensioners live. Not only does it offer one of the warmest year-round climates, boast fantastic sports facilities (particularly for golfers) and cheaper house prices but—until now at least—there have been significant tax advantages too thanks to Portugal’s non-habitual resident scheme.

This year, the ruling Socialist Party in Lisbon introduced an amendment to the budget which will levy a tax on the foreign revenue of pensioners who move to Portugal; those who have lived there before March 31, 2020 will not be affected. At 10 per cent, however, it’s still lower than that changed in many other countries, including the UK, and other forms of foreign income is tax free for the first 10 years.

Anyone thinking about retiring abroad should consult the Government’s website first. It advises on the various steps to take including informing the local council and benefits office as well as how to get in touch with the international pension centre.


Pension pot properties for sale

Ideal for golfers
This brand-new development of smart contemporary apartments stands in the long-established resort of Sotogrande which boasts easy access to some of the best golf courses in Europe. The apartments come with three bedrooms, underground parking and access to a large swimming pool and gym. €404,000 through Winkworth Spain

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Live on the beach
Set on the outskirts of the lively town of Estepona, just a few minutes from the centre and its marina, this new apartment building offers owners direct access to the beach. A two-bedroom ground-floor apartment with a large terrace is on the market for €670,000 through Winkworth Spain.

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Enjoy views of the Atlantic
This two-bedroom apartment (with elevator access) stands in the centre of Praia da Luz with the beach, restaurants and supermarkets all within a five-minute walk. It’s easy to manage and has spectacular views from the generous balcony. €220,000 through Winkworth International.

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