Pension freedoms have made moving abroad a tempting option.
Look at 10 European countries and some of the costs of living there.
Property prices are threshold estimates for desirable properties (there are cheaper options), based on Rightmove, which covers all of these countries.
Bear in mind regional variations in prices. They will be significantly higher in popular beach areas, such as the Algarve in Portugal and the Costas in Spain. In France, there is a particularly acute divide between values in the capital and elsewhere.
Pension taxation is the effective rate that will be paid (usually that of the resident country). Double taxation treaties ensure you can claim relief if you're taxed twice or where you shouldn't be. There may also be the option to transfer a pension abroad using the Qualifying Recognised Overseas Pension Scheme (QROPS), although we would urge caution.
The restaurant price index and food prices are taken from cost of living database Numbeo, while fuel prices were taken from Fuel Prices Europe.
Croatia
Property prices
Two bedroom flat: £70,000 and up
Three bedroom house: £115,000 and up
Four bedroom detached house: £150,000 and up
Pension Taxation
Previously, pensions received from abroad were zero rated for tax. But it appears that following a 2015 double taxation treaty with the UK, pension income counts as worldwide income and is therefore liable for Croatian income tax. This ranges from 12pc to 40pc.
Living costs
Restaurant price index: 37.57 (UK 86.68)
Cost of food: £133.45 recommended monthly minimum per person
Petrol price: £0.93/litre
Spain
Property prices
Two bedroom flat: £30,000 and up
Three bedroom house: £60,000 and up
Four bedroom detached house: £75,000 and up
Pension Taxation
Occupational and state pensions both count as general income, so are taxed at progressive rates from 19pc to 45pc. Purchased annuities are viewed favourably, with a flat tax rate and tax-free element, but there is a grey area surrounding eligibility here. Pension lump sums should be taken in the UK before moving, as they are taxable for Spanish residents.
Lifestyle costs
Restaurant price index: 56.99 (UK 86.68)
Cost of food: £153 recommended monthly minimum per person
Petrol price: £0.91/litre
Portugal
Property prices
Two bedroom flat: £70,000 and up
Three bedroom house: £100,000 and up
Four bedroom detached house: £120,000 plus
Pension Taxation
No tax on pension income as a non-habitual resident for the first ten years, including taking large lump sums. Pension income taxed at Portugal's marginal rates after that.
Lifestyle costs
Restaurant price index: 41.56 (UK 86.68)
Cost of food: £132 recommended monthly minimum per person
Fuel price: £1.14/litre
Greece
Property prices
Two bedroom flat: £70,000 and up
Three bedroom house: £85,000 and up
Four bedroom detached house: £130,000 and up
Pension Taxation
As a resident, foreign pension income counts towards total income, meaning it is liable for tax ranging from 22pc to 42pc.
Lifestyle costs
Restaurant price index: 55.07 (UK 86.68)
Cost of food: £146 recommended monthly minimum per person
Petrol price: £1.03/litre
France
Property prices
Two bedroom flat: £60,000 and up
Three bedroom house: £70,000 and up
Four bedroom detached house: £80,000 and up
Pension Taxation
A lump sum will be taxable in France (7.5pc flat rate) so is worth taking before moving. State and other pension income is taxed the same way as a salary, with rates ranging from 0pc to 45pc. Private pensions receive a 10pc deduction on the amount of income assessed, and annuities can receive discounts ranging from 30pc to 70pc.
Lifestyle costs
Restaurant price index: 55.07 (UK 86.68)
Cost of food: £236 recommended monthly minimum per person
Petrol price: £1.03/litre
Italy
Property prices
Two bedroom flat: £60,000 and up
Three bedroom house: £90,000 and up
Four bedroom detached house: £140,000 and up
Pension Taxation
Pension income will be subject to Italian income tax, including the 25pc lump sum that would be tax-free in the UK. Italian income tax ranges from 23pc to 43pc plus regional and local charges.
Lifestyle costs
Restaurant price index: 75.27 (UK 86.68)
Cost of food: £200 recommended monthly minimum per person
Petrol price: £1.16/litre
Germany
Property prices
Two bedroom flat: £100,000 and up
Three bedroom house: £150,000 and up
Four bedroom detached house: £200,000 and up
Pension Taxation
Generally pensions qualify as taxable income (at 0pc to 45pc, plus a 5.5pc solidarity surcharge), but the amount and portion taxed depends on the type of pension, employer contribution and tax treatment during contribution.
Lifestyle costs
Restaurant price index: 60.68 (UK 86.68)
Cost of food: £179 recommended monthly minimum per person (UK £185.58)
Petrol price: £1.02/litre
Cyprus
Property prices
Two bedroom flat: £45,000 and up
Three bedroom house: £80,000 and up
Four bedroom detached house: £150,000 and up
Pension Taxation
Cyprus is well known as a tax haven for British retirees. UK pension income can be taxed either at a flat rate of 5pc on the excess over €3,420 or at the normal scaling rates, decided annually by the taxpayer. Pension lump sums are also normally free of tax.
Lifestyle costs
Restaurant price index: 59.72 (UK 86.68)
Cost of food: £158.74 recommended monthly minimum per person (UK £185.58)
Petrol price: £0.85/litre
Austria
Property prices
Two bedroom flat: £140,000 and up
Three bedroom house: £175,000 and up
Four bedroom detached house: £225,000 and up
Pension Taxation
Pension income will be subject to Austrian income tax, including the 25pc lump sum that would be tax-free in the UK. Austrian income tax ranges from 0pc to 50pc, with one off payments (up to a sixth of all regular payments in the same tax year) charged at 6pc. There is also a deduction for pensioners depending on income level.
Lifestyle costs
Restaurant price index: 62.64 (UK 86.68)
Cost of food: £219 recommended monthly minimum per person
Petrol price: £0.80/litre
Ireland
Property prices
Two bedroom flat: £60,000 and up
Three bedroom house: £90,000 and up
Four bedroom detached house: £125,000 and up
Pension Taxation
Pension income will be taxed under Irish income tax - there is a 20pc band and a 40pc band. Unlike many other European countries however, UK pensioners will still be able to access their 25pc lump sum free of tax.
Lifestyle costs
Restaurant price index: 82.30 (UK 86.68)
Cost of food: £195 recommended monthly minimum per person
Petrol price: £0.99/litre
Reference: http://www.telegraph.co.uk/pensions-retirement/financial-planning/10-european-countries-for-british-retirement-living-costs-proper/