The 7 Best Places to Retire in Europe
Whether it’s the food, the cost of living, or simply the sun, retiring abroad is an appealing idea.
Retirement offers the prospect of new horizons and the ability to fill your days however you wish.
With no job tying you down, there’s no reason not to look further afield, living the life you’ve worked hard towards.
While the world is your oyster, many retirees choose to settle somewhere in Europe for its familiarity and proximity to the UK.
Despite Brexit complicating things somewhat, the Continent still holds many benefits for British citizens and the promise of a happy retirement.
However, deciding the best place to retire in Europe is no easy task.
To aid in your search, therefore, we have compiled a list of possible retirement locations. While the beauty and culture of a place are important factors, we have also included some practical considerations such as visa and tax benefits.
Among other questions we will consider include:
- Will I need to learn a new language?
- Is it cheap to live there?
- What about healthcare?
- Can friends and family come and visit?
As the most popular retirement for retired Brits, Spain is an obvious choice. With many of us visiting the country throughout our lives on family holidays, the appeal of familiarity is an important factor. Over 100,000 retired Brits have now made sunny Spain their new home, and it's easy to see why.
One of the most attractive reasons to retire in Spain is the lower cost of living without sacrificing luxuries or amenities. Living here is, on average, anywhere up to 30% lower than living back in the UK. Retiring to Spain will require a pension pot that provides an income of around £15,000 on top of the state pension.
When weighing up the cost with the standard of living, Spain tops the list of places to retire. Whether you're looking to rent or buy, property prices are considerably lower than back home, with the benefit of a much more temperate climate.
Tax-wise, Spain prefers pension holders to purchase annuities that will pay out a set income. This renders 76% of the income tax-free.
English is also spoken ubiquitously, and Spanish is one of the easier languages to pick up should you wish.
You'll also be treated the same as locals when it comes to healthcare after filling out the obligatory S1 form. While healthcare remains free at the point of use, retirees tend to opt, instead, for private healthcare where English is spoken more fluently.
Best for Climate
Just like the people, Malta is warm and accommodating. The country enjoys more than 3000 hours of sunny weather each and every year, with the temperature averaging around 19C.
Sitting in the Mediterranean Sea, Malta is just a 3-hour flight away from the UK, making it easy and relatively cheap to see friends and family. Located just off the continent, Malta is the ideal location for those who love to meet new people and don’t mind a bit of hustle and bustle.
With both English and Maltese donned the official languages, you won’t have much trouble being understood with nearly all inhabitants speaking the former. The hallmarks of being a former British colony are everywhere, with driving on the left and 3-pin plugs being the most obvious signs of home.
As an island, the Maltese economy relies heavily on importation. This does reflect in the price of goods, with food and accommodation keeping in line with the UK equivalents, though there are some bargains to be had in terms of property, fuel, alcohol, and transportation.
Since Brexit, acquiring retiree status in Malta means going through immigration, something it’s highly advised to use a lawyer for.
Your pension will be taxed in Malta rather than back in the UK, which comes in at a flat rate of just 15%. Any of your pension pot that’s left outside of the country won’t be taxed.
Public healthcare is commendable in Malta, with most ex-pats opting to pay as they go, thanks to the reasonable medical charges after the free point of entry. These do add up, though, so it’s always worth looking at insurance plans.
Best for Food
For those who just want to spend their retirement supping good wine and chowing down on hearty food, Italy’s the place to go.
With traditional dishes and wine varieties spread throughout the country, there’s always something new to try and a place to explore while doing so. The Abruzzo region, for example, is host to its famous wine namesake. Tuscany, too, is famous for its wine and delicious stews.
Retiring to Italy means for the first nine years, you’ll only pay 7% tax on any income from your pension. This low tax rate goes up after that, however, with the bottom tax-band sitting at 23%, ranging to 43% for income over £75,000 a year.
The Italian people are famous for their loud and cheerful hospitality, making it a great location for the more outgoing among us. Each village, town, and city has its own unique character, with the country enjoying a variety of different climates.
While the abundance of olive oil and fresh seafood will no doubt do wonders for your health, healthcare is still available for those choosing to fill out the S1 form and apply for the tessera sanitaria card. This is the equivalent of a health pass and is scanned each time you use a health service.
Nevertheless, with highly affordable rates, top-up insurance is highly recommended.
Best for Culture
A short hop across the channel, and you’ll find yourself immersed in art, style, the love of food, and a culture that values family and gatherings.
As a retirement destination for the culture-lover, France is ideal. Stick to the North, and you’ll find cities chock full of galleries, fine cuisine, museums like the Louvre, palaces, and history around each and every corner. Settle near the South, and you’ll get a taste of the more rural French culture.
Obviously, getting to and from France is a breeze with multiple ferry lines, quick plane trips, and the Eurostar all offering a speedy arrival. With the arrival of Brexit, however, non-EU citizen Brits looking to settle in France will now need to apply for residency status.
The French are proud of their language and prefer retirees to attempt to speak it if possible. Despite the proximity, English speaking is not as common as it is in other countries, and brushing up on your masculine single and feminine plural may be worth the time.
France is often on par or more expensive than Britain in terms of cost of living, so a healthy pension pot is recommended. Tax-wise, however, France is relatively attractive, offering the option for 7.5% tax on a lump sum with a 10% tax-free allowance on the remainder. France’s tax system is a complicated beast, however, and financial advice is highly recommended to maximize your savings.
As with all EU countries, an S1 form is all it takes to get free point of entry healthcare, with the over 65s enjoying full reimbursement for costs.
Best for Quality of Life
Well-remarked upon for its high standard of living, beautiful architecture, and generous social security, Austria has become a home for life for many UK ex-pats.
For most people, when they think of Austria, they think of Vienna. While not the cheapest destination, the city was awarded Mercer’s Quality of Living award, making it officially the best place to live in the entire world.
Austria finds itself with relatively cheap housing with lavish historic buildings often used for apartments. These properties are abundant in cities such as Vienna and really accentuate the beautiful facades and indoor flooring.
Austria also enjoys a wonderful infrastructure with transport links connecting the entire country easily. Despite this, the country has some of the cleanest air quality in the world, priding itself on cracking down on pollution and emissions.
Taxation is run as a pay-as-you-go scheme, meaning tax is bracketed each year according to the previous year’s income.
The country is also very senior-friendly, with those 65 or over able to acquire an Austrian train pass for around £25 a year. With German as the official language, the culture is both upfront, honest, and friendly. While a language test is only required for those looking to work in Austria, it’s still advised to learn the basics.
Healthcare is available for everyone in Austria, retirees, ex-pats, rich, and poor alike. Public health insurance is free for those under specific incomes or those with a disability.
6. N. Cyprus
Best for Finances
Just 40 miles off mainland Turkey, North Cyprus offers ex-pats the opportunity to stretch their pension pot as much as possible. Governed by Turkey, the northern part of the island is less cosmopolitan, but also less touristy than its Southern half.
The border can be freely crossed, however, making the entire 140 mile stretch of Cyprus yours to explore. Whether it’s hiking, beaches, dining out, or simply sitting and watching the world go by, the whole of Cyprus can be explored easily, traversed within a couple of hours by car.
Settling in the northern part of Cyprus, however, means retired Brits can expect to enjoy the cost of living slashed on average by 50%. Accommodation, for example, is a whopping 80% cheaper than the UK, with the average shop coming in 40% less.
Most attractive to those wanting to maximize their pension is that in North Cyprus, income from a pension is not taxed. The downside is with no social security agreement with Turkey, state pension increases will not be reflected while you remain a resident of North Cyprus.
Retirees will want to get a healthcare plan, however, costing between £900 and £1500. This top-up to the state health insurance ensures any procedures or treatments won’t ruin your retirement plans.
Best for Natural Beauty
With its low population and 8 National Parks, Croatia is a destination for those who want to retreat to the great outdoors.
Perhaps the most beautiful is the Plitvice Lakes. Here, ex-pats can explore 183 square miles of chained lakes and forests right in the centre of Croatia. Famed for its warm, rolling green hills and vibrant blue skies, Croatia’s rural areas are pristine due to a declining population seeking work elsewhere in the EU.
For retirees, however, Croatia still stands as one of the most beautiful places to settle down. A one-year residence permit can be obtained by paying for a year’s rent upfront. This is a great way to test the water and see if the country’s pace of life suits your temperament.
For those looking to settle longer-term, however, owning a residential property in Croatia entitles you to nine months residency every year. Perfect for those looking to only spend some of the year abroad.
With the UK having a double taxation treaty, tax on your pension will be paid only in Croatia.
All Croatian residents need to have state health insurance through the national fund, HZZO. You’ll need private insurance, in addition, to apply for this. The Croatian healthcare system is not as robust as the NHS, however, so most ex-pats opt for private healthcare through the use of private clinics that are abundant.
Best Places to Retire in Europe - Summary
Europe offers a plethora of retirement options, whether you are seeking sun, solitude or simply making the most of your savings.
For some, this new chapter could involve revelling in the culture of a big city, while for others it might mean buying a rural finca in the countryside.
Whatever your dream, retiring abroad provides a welcome change of scenery and could be just the type of travel adventure you are looking for.
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