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Cost of living

Posted on: 16th Jan 2015

No doubt you would like to estimate how far your money will stretch abroad and how much you will have left after paying your bills. The cost of living has risen considerably in most countries in the last decade or so, and some countries that previously enjoyed a relatively low cost of living are no longer quite so attractive, particularly for retirees. On the other hand, foreigners whose income is paid in 'hard' currencies, such as those of most northern European countries and North America, have seen their incomes rise sharply in international terms in recent years. At the same time, the difference in the cost of living between 'rich' (e.g. North American and northern European) countries and 'poor' countries has widened in real terms in favour of the richer countries.

            If you spend only a few weeks abroad each year, you won't be too concerned about the local cost of living. However, if you plan to live abroad permanently you should ensure that your income is, and will remain, sufficient to live on bearing in mind currency devaluations (if your income isn't paid in local currency), inflation, and extraordinary expenses such as medical bills or anything else that may drastically reduce your income (such as stock market crashes and recessions!). Note that if your pension is paid in a currency that's devalued, this could have a catastrophic affect on your standard of living. Also bear in mind that some countries (e.g. Britain) freeze state pensions at the current rate for those going to live permanently in certain countries.

            It's difficult to calculate an average cost of living for any country, as it depends very much on an individual's particular circumstances and life?style, and where you live. It's generally cheaper to live in a rural area than in a large city or a popular resort area (and homes are also much cheaper). The actual difference in your food bill will depend on what you eat and where you lived before moving abroad. Food in most southern European and Mediterranean countries is cheaper than in most northern European countries, although North Americans will find it costs around the same or more. 

            Further information is available in our Living and Working series of books.


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