Opinion: Is Portugal the best place to retire to?

Lisbon, Portugal old town cityscape at dusk

Lisbon, in Portugal, which has topped the list of places to retire according to a new Retirement Living study - Credit: Getty Images/iStockphoto

A disappointingly wide selection of middle age concerns came to the fore last Saturday night as a group of us sat around shooting the post-dinner breeze.

My wife and I were joined by four friends, including our hosts, and as conversation progressed without a hint of pregnant pause, the night began to have the makings of one when, around 11.30pm, someone suggests a ‘small glass of port’ (it never is), a suggestion enthusiastically embraced by those who cannot recall the consequences of the last time a midnight glass seemed a good idea.

Before any such suggestions were made, a lively discussion veered this way and that, although there was one topic which dominated.

Our hosts had recently returned from a fortnight’s break in Majorca and had clearly given plenty of thought to living on the small Mediterranean island full time, an idea which struck a chord with all six of us to a greater or lesser degree.

Happy mature couple sharing food while having lunch at dining table. Focus is on woman.

Dinner party conversation turned to retiring to a warmer climate - Credit: Getty Images/iStockphoto

On balance, the idea met with unanimous approval: a temperate climate, friendly people, beautiful waters, easy connections from Palma airport. “There’s only one problem,” declared our host, adding: “Putting our hands on the €7.2 million we need to buy the house we saw in Port Andratx.”

Five of us nodded in unison; one guest went further: “On top of which you have to consider things like dental appointments, visiting the doctors’ surgery, receiving regular supplies of medication, your pension….”

None of these hurdles are insurmountable, but the intervention was, for a short while at least, a conversation-stopper.

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Over the past 18 months, millions of people have given serious thought to effecting a radical change to their lives by moving overseas. During the same period, online property portal Rightmove reports a ‘significant’ increase in enquiries from British users wishing to acquire an overseas property, split 50/50 between holiday homes and permanent residency.

Passengers commercial airplane flying above clouds, front view. Concept of fast modern travel

Over the past 18 months, millions of people have given serious thought to effecting a radical change to their lives by moving overseas - Credit: Getty Images/iStockphoto

Portugal and Spain are Rightmove’s two most popular destinations, a point reinforced earlier this week when US personal finance website Retirement Living published a report headed ‘Best countries to which to retire’. The report is supported by financial analysis and, though written for the American market, is relevant for Brits too.

“Retiring to another country can help stretch your savings with affordable living costs and tax benefits. Low-cost, high-quality health care is often an appealing reason to consider retiring abroad,” says the report, which confirms that “many retirees find [that] immersing themselves in international living fulfils a lifelong dream.”

The report ranks the most attractive destinations using several economic data: quality of life, inflation, unemployment, housing costs and climate data. It also measures affordability and lifestyle to create a top 10 best countries for retirement.

Each nation’s cost of living index takes account of the average cost of food, housing, energy, transportation, health care and other daily expenses; the index is measured against similar data from the United States.

The report also uses a ‘Purchasing Power Index’ to measure each country’s average income against the cost of living index.

Swimming pool at a modern luxury villa in Greece

A more temperate climate is attractive to those considering a move overseas - Credit: Getty Images/iStockphoto

In addition, the publication’s ‘Quality of Life Index’ determines the level of political and economic stability, legal practices, civil rights, health services, medical services and safety and climate data combined with the cost of living, average income and foreigner-friendliness.

Eight of Retirement Living’s top ten are in Europe, with Portugal coming out on top, its cost of living lower than any of the other nine. It’s worth noting that the Portuguese government seeks to attract foreign retirees with lower taxation for up to 10 years.

Second is the Netherlands, already home to more than 3.5 million foreigners; the Dutch quality of life index includes high scores for health care, safety, civil rights and stability.

Not surprisingly, Australia features prominently. Renowned for its welcoming, laid-back population, retire to Australia and you’re likely to be content – and warm. Unfortunately, the Aussies are not currently granting retirement visas unless you have family in the country or have been in Australia long term while contributing to and being well-established in the community.

Should you be contemplating life in France, a good knowledge of the language is highly recommended, while patience is essential when dealing with the country’s armies of bureaucrats, both governmental and in the private sector.

Spain appears in fifth place on the Retirement Living list. Only Portugal has a lower cost of living, while only Australia (and Luxembourg) score better on the quality of life index. The country’s 3,000 miles of coastline, coupled with a warm welcome, are two additional reasons why Spain remains as popular as ever with Britons. Moreover, dropping €7 million on a home is not essential because property remains attractively priced.

Retirement Living

Top 10 with cost of living measure in brackets.

1. Portugal (74.4)

2. Netherlands (97.4)

3. Australia (109.2)

4. France (95.4)

5. Spain (79.9)

6. Belgium (96.3)

7. Italy (96.3)

8. Japan (106.9)

9. Luxembourg (113.7)

10. Germany (90.5)

Note: the index is measured against US figures. A score higher than 100 means the cost of living is higher than in the United States; scores under 100 reflect a comparatively lower cost of living than the US.