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The cheap cost of living and warm climate makes Portugal a top retirement destination for British expats.
With mile upon mile of sandy beaches, warm seas and vibrant nightlife, Portugal are one of the most popular holidays and retirement destinations for Brits, with more than 60,000 expats already living there full-time.
Besides the lifestyle and warm climate, a big attraction is the cheap cost of living that makes day-to-day spending much less than in the UK. In this guide, we take an in-depth look at these costs.
Table of contents
Cost Of Living In Portugal Compared With The UK
The average cost of living in Portugal is 28% cheaper than in the UK, making the country popular with expats retiring on a budget.
Housing costs are also much lower than in the UK – by around a third.
Cascais is the most expensive city to live in, followed by the capital Lisbon and the cities of Porto and Funchal, on the island of Madeira.
Portugal Living Costs Breakdown
Lower salaries reflect a cheaper cost of living in Portugal, but even the British state pension has decent spending power.
The average monthly take-home salary in Portugal is €834 (£719.54), while the UK new state pension top payment is €902 (£778).
Living costs for a family of four without rent or a mortgage are £1,606 a month (€1,864), while a single person spends around £457 a month (€531).
This rises to £2,448 (€2,839) for a family renting a three-bedroom city centre apartment or £964 (€1,118) for a singleton renting a one-bedroom city centre apartment.
Here’s a more detailed price breakdown:
Eating Out
| Average Price € | Average price £ | |
| Cheap restaurant | 7.99 | 6.89 |
| Three-course meal for two at a mid-priced restaurant | 29.97 | 25.84 |
| McDonald’s | 6 | 5.17 |
| Domestic beer (500 ml draught) | 200 | 1.72 |
| Imported beer (330 ml bottle) | 2 | 1.72 |
| Cappuccino | 1.37 | 1.18 |
| Coke\Pepsi (330 ml) | 1.31 | 1.13 |
| Water (330 ml) | 0.95 | 0.82 |
Daily essential groceries
| Average Price € | Average price £ | |
| Milk (1 litre) | 0.63 | 0.54 |
| Loaf of white bread | 1.09 | 0.94 |
| Rice (1 kg) | 0.9 | 0.78 |
| Eggs x 12 | 1.75 | 1.51 |
| Cheese (1 kg) | 6.69 | 5.77 |
| Chicken fillets (1 kg) | 4.99 | 4.3 |
| Beef (1 kg) | 9.14 | 7.88 |
| Apples (1 kg) | 1.53 | 1.32 |
| Bananas (1 kg) | 1.07 | 0.92 |
| Oranges (1 kg) | 1.21 | 1.04 |
| Tomato (1 kg) | 1.43 | 1.23 |
| Potato (1 kg) | 0.93 | 0.8 |
| Bottle of wine | 3.99 | 3.44 |
| Cigarettes (1 x 20 Marlboro) | 5 | 4.31 |
Getting Around
| Average Price € | Average price £ | |
| Taxi (per kilometre) | 0.6 | 0.52 |
| Gas (1 litre) | 1.52 | 1.31 |
| Buy new VW Golf 1.4 / 90 KW Trendine | 24,975.74 | 21,530.81 |
Utilities (monthly)
| Average Price € | Average price £ | |
| Utility package for 85m2 apartment (Electricity, heating, air conditioning, water, garbage disposal etc.) | 101.38 | 87.4 |
| Prepaid smartphone (1 minute) | 0.16 | 0.14 |
| Internet (60+ Mbps broadband with unlimited data) | 32.93 | 28.39 |
Sport and Entertainment
| Average Price € | Average price £ | |
| Fitness club, monthly charge for x1 adult | 31.97 | 27.56 |
| Tennis court rent (1 hour on the weekend) | 12.1 | 10.43 |
| Cinema ticket x1 seat | 6.99 | 6.03 |
Childcare
| Average Price € | Average Price £ | |
| Preschool (or Kindergarten), full-day, private, monthly x1 child | 340.92 | 293.9 |
| International primary school, yearly x1 child | 7,083.32 | 6,106.31 |
Clothing and Shoes
| Average Price € | Average price £ | |
| Pair of jeans (Levi’s 501) | 77.48 | 66.79 |
| Summer dress in a chain store (Like Zara or H&M etc.) | 28.73 | 24.77 |
| Pair of Nike running shoes | 66.78 | 57.57 |
| Pair of men leather business shoes | 77.73 | 67.01 |
Portugal – Renting Or Buying A Home
Expats can buy a home anywhere in Portugal without too much hassle.
Buyers will need to register for a Portuguese tax number, but this is possible even for non-residents.
Portuguese banks will lend to foreigners, but only up to 70% of the value of a home, so expats need at least a 30% deposit plus extra money in the bank to pay the purchase costs.
Make sure to check out our comprehensive guide to buying a property in Portugal.
Generally, house prices have risen solidly over the past five years between 4.5% and 8% a year, hitting 6.5% in 2020.
The average price of a home per square metre is €1,144 (£984).
Learn more in-depth information about paying tax in Portugal.
Monthly Rents
| Average Price € | Average price £ | |
| Family of four living costs (including city centre rent) | 2,839.69 | £2,448.01 |
| Family of four living costs (including suburban rent) | 1,249.45 | £1,077.11 |
| Family of four living costs (excluding rent) | 1,863.12 | 1606.14 |
| Singleton living costs (including city centre rent) | 1,118.48 | 964.21 |
| Singleton living costs (including suburban rent) | 445.63 | 384.16 |
| Singleton living costs (excluding rent) | 531.12 | 457.86 |
Rent (Monthly)
| Average Price € | Average price £ | |
| City centre 1 bed apartment | 587.37 | 506.35 |
| Suburban 1 bed apartment | 445.63 | 384.16 |
| City centre 3 bed apartment | 976.57 | 841.87 |
| Suburban 3 bed apartment | 718.33 | 619.25 |
Buying an Apartment
| Average Price € | Average price £ | |
| City centre price per square metre | 2,589.97 | 2,232.73 |
| Suburban price per square metre | 1,666.97 | 1,437.04 |
Mortgage Rate
| Mortgage rate – Fixed 20-year term | 2.50% |
Common Question about Living Costs in Portugal
Portugal is in the Eurozone, so it uses the euro as currency. The exchange rate is 0.86 to the Pound at the time of writing.
Average earnings in Portugal are €2,750 a month before deductions, according to research by web site Salary Explorer.
Popular jobs with expats are project engineers, software engineers and pharmaceutical product managers.
IT jobs attract the highest salaries ranging from €1,333 to €5,272 a month (£1,146 to £4,535). Project and pharmaceutical managers are on slightly less – €1,500 to €4,500 a month (£1,290 to £3,900).
The Portuguese government offers special retirement visas to attract wealthy expats. The visa is designed for expats with a steady income from pensions, savings and investments.
On arrival, expats should have a four-month residence visa to apply for a 12-month Autorizacao de Residencia.
The residence visa is renewed after 12 months and then every two years. After five years, the expat is usually granted permanent residence.
The UK government will pay the state pension in Portugal and has pledged to apply any living costs increases following Brexit.
Note that the pension can only be paid in one country, so expats living in Portugal need to opt for payment in Portugal or the UK for part of the year.
British expats need to register as residents in Portugal to access healthcare on the same basis as Portuguese nationals. They may also qualify for subsidised treatment with a UK Form S1 once drawing the UK state pension.
Doctors and hospitals charge modest fees for many treatments – a GP appointment is €5 while a trip to a hospital in an emergency is €15.
The health service in Portugal does not cover dental care, so that expats may need appropriate insurance.
Other European Destination Guides
Make sure you read the guide on moving abroad before you decide. In addition, you can find other European country guides following the links below.
- Guide to Living In The Netherlands
- Living In Berlin Guide
- Spain expat guide
- Expat Guide To Living In Italy
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