Monthly Wrap: Affordable expat destinations in 2023

At the beginning of 2020, in the midst of a global pandemic, Forbes released a list of ‘10 places so cheap you might be able to stop working’. The implication was that individuals from America specifically could pay living expenses abroad for a fraction of the cost they are accustomed to, thereby saving the excess and not needing any regular earnings.

The lifestyle appeals to many of us – relocate somewhere new and exciting and as an added bonus, save money by doing so. But at the tail-end of 2022 and into 2023, It’s easy to be sceptical that living costs elsewhere remain low while America, Europe and other developed economies struggle with inflation.

This article will revisit some of the countries suggested as ‘cheap’ in 2020 and 2021 as well as considering alternatives.

Portugal

According to International Living, which publishes the Annual Global Retirement Index, Portugal was the number-one affordable expat destination in 2020. The index takes into account cost of living, visas, healthcare and more.

Jennifer Stevens, the company’s Executive Director said two years ago that Portugal was ‘the best-value destination in western Europe today… a place where not only do dollars really stretch, but where the quality of life is high, healthcare is excellent and lost-cost, the pace is slow and pleasant and the populance is unendingly welcoming.’

Fast-forward to 2022 and Portugal is still in the top ten, ranking at number four. The team at International Living cite hospitality, picturesque scenery and quality healthcare as recommendations, once again; in terms of living costs, modern expats reckon it costs approximately one-third less to live in Portugal than in the USA.

Taking into account other opinions – and possibly the reason behind Portugal’s surrender of the top spot – the country doesn’t seem to score as well across wellbeing indicators.

The 2021 Natixis Global Retirement Index ranked Portugal 26^th out of 44 countries, affording it 61/100 for ‘material wellbeing’; similarly, the OECD Better Life Index gave the country below-average scores for health status, subjective wellbeing and jobs & earnings.

Furthermore, Portugal has not escaped the cost-of-living crisis sweeping across the globe and wreaking havoc in our economies. Nevertheless, there is optimism from some quarters as analysts at BNP Paribas affirmed that Portugal should be one of the best performing Eurozone economies in 2022.

Malta

Scoring 9^th out of 25 countries in International Living’s 2021 index and 8^th in 2022, Malta is renowned for its temperate climes, old-world charm and cosmopolitan demographic.

International Living correspondent Mary Charlebois says of the country: ‘Sitting right at the heart of the Mediterranean, Malta blends the best of southern-European graciousness with one of the best qualities of life to be found in Europe.’

Contributing toward the quality of life are a good healthcare system – in 5th place globally – as well as low crime rates. Malta is also a great place to raise a family, as schools teach predominantly in English and are free to attend.

The 2021 Natixis Global Retirement Index ranked Malta 20^th in 2021, scoring it highly for finances in retirement and material wellbeing. What makes it one of the more affordable places to live is a low income tax rate: capital and overseas capital gains can be remitted tax-free, with no minimum income level required.

On the other hand, houses and apartments in Malta are not as cheap as you might hope.

Furthermore, Malta has not been unaffected by global inflationary pressures – but prices have risen in 2022 by less than elsewhere, with annual inflation predicted to print at 5.6% annually. The rate of inflation is expected to fall to 3.3% in 2023, as the government is committed to limiting energy price growth.

Spain

According to International Living, the cost of living in Spain is one of the lowest in Western Europe, even in the cities. What’s more, Spain ranks in the top ten for 2022’s ‘Best places to retire’ and – the cherry on the cake – was considered as having the best healthcare in the world by the World Economic Forum in 2020.

Further compelling expats to pick Spain over other tempting destinations are its sunny weather, first-world infrastructure and sense of safety. American expat Marsha Scarbrough reports: ‘Aside from a few pickpockets, crime is nearly non-existent. Homelessness is quite rare. It’s almost impossible to own a gun. You can feel at ease walking anywhere in the middle of the night.’

For a fraction of the price you’d pay in America or the UK, Spanish residents can enjoy a good quality of life. The OECD Better Life Index acknowledges: ‘Spain performs well in a number of well-being dimensions relative to other countries’; the International Living team concludes a couple could easily live on $20,000 to $22,000 a year and still eat out regularly.

Preventing Spain from climbing higher up the rankings are a lower-than-average assessment of job prospects, education and life satisfaction. Spaniards earn less per year on average than in other countries surveyed, while the average student in Spain scores below average in reading literacy, maths and sciences.

On the plus side, however, it is still possible to find competitively-priced accommodation, with some apartments in smaller cities costing under $100,000. Moreover, inflation fell for the second consecutive month in September, fuelling hopes that the peak in price rises has passed.

Other considerations

If you’re looking to save money on your move abroad, consider making changes that will limit unnecessary spending regardless of your destination.

Setting a clear budget can help, enabling you to keep track of your expenses and making sure there’s money left over for you to make the most of your overseas experience.

Another recommended measure is using a trusted currency exchange provider, so that you’re not paying over the odds for your currency transfers. Currencies Direct offer competitive exchange rates alongside financial management tools such as limit orders and forward contracts.

For more information, get in touch with our team via Business@currenciesdirect.com or call +44 (0) 20 7847 9400.