UK expats overseas squeezed by soaring living costs and falling house prices

Published:  16 Sep at 6 PM
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Thousands of Brits emigrate to warmer, more laid-back climes every year, but might just be better off staying in their home country, according to a recent survey.

The study, commissioned by the Post Office’s Expats Payment Index, revealed that the cost of living in a number of popular expat destinations has risen by up to 10 per cent in the last year. Meals out, the cost of motoring and household bills saw the largest increases.

Almost 40 per cent of those surveyed estimated their total living costs had spiked at over 10 per cent in 2012, with the increase in the cost of electricity the biggest worry. Worse news yet is that 52 per cent of property owners reported that the value of their investment had dropped sharply during the same period.

Whilst property prices in many UK regions have been on the rise, 35 per cent of expat property owners said the year-on-year drop on the value of their homes had been between 10 and 20 per cent on top of sharp falls in the previous year. Expats in the eurozone have been the worst hit, with one in every five living in Portugal reporting 20 per cent increases in living costs.

Expats in Greece had a slightly easier time with increases of around 10 per cent, and Spanish property prices are still falling. Even those living in France are feeling less positive than last year, with a high percentage of those surveyed unhappy about rising prices.

The many thousands of UK pensioners living in countries where their state pensions are frozen from the time of emigration are especially vulnerable to local inflationary pressures. Almost all of those affected live in Commonwealth countries including Australia, Canada, New Zealand and South Africa, yet those living in the USA have pension parity with UK retirees.
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