Sunnier climes and a brighter financial outlook: Would emigrating be better for your money?

Can’t afford a house? Worried about the cost of retirement? Wish you could live on less? Maybe emigrating is your best bet

With the cost of living in the UK continuing to rise faster than wages, both millennials and baby boomers are considering moving abroad

There have always been Britons who choose to head abroad, sometimes for work and sometimes simply to seek sunnier climates. And following the Brexit vote, there has been a surge in British citizens moving overseas in search of a political climate that’s more to their taste.

But it seems that some people are pinning their hopes of an affordable retirement on a move to a cheaper place. And, when we say “some people” we mean those people whose retirement incomes look far less rosy than those of the current crop of baby boomers.

LV=’s 10th annual State of Retirement report shows a real appetite among non-boomers for moving overseas when they finish work – and the cost of living in the UK is a major driver.

It found that 82 per cent of over-55s who still work intend to stay in the UK when they retire, but that drops to just 64 per cent for those aged between 35 and 55.

The weather is a key driver – is it really so bad in the UK? – with 22 per cent of those planning to move abroad in retirement because they want more sun. However, another 22 per cent say they’re attracted by the potential for cheaper living costs.

And it’s not just for retirement. A recent report suggests that millennials are increasingly packing their bags and moving off-island too, searching for a cheaper way of life.

Cheaper homes overseas

The international relocation company MoveHub carries out an annual survey of people’s reasons for emigrating and the countries they are choosing to move to.

In 2016, it asked clients what had made them want to leave the UK. While the weather was a popular reason, more than 30 per cent said the high cost of housing was a key factor.

That certainly seems unlikely to change, with the latest figures from the Office for National Statistics showing that annual house price inflation across the UK increased to 5.4 per cent this month, with the monthly rate at 0.4 per cent.

And this week, inflation was still sticking at its five-year high, although food prices were shown to be rising at an annual rate of 4.1 per cent. The cost of living in the UK is continuing to rise faster than wages. In fact, new figures suggest that the average worker will earn less in 2022 than they did in 2007.

The think tank that carried out that damning assessment, the Resolution Foundation, has warned that this has “terrible implications for family living standards”.

Meanwhile, the money transfer company TransferWise highlights just how much more affordable life can be in certain European cities.

It’s possible to join about 40,000 British expats in Budapest, where a three-bedroom apartment costs around €500 (£445) a month, or Prague, where a large studio flat costs €400 and half a litre of beer just €1.50.

Athens is about 80 per cent cheaper than London and it’s possible to get a one-bedroom city centre apartment for under €300, partly because it is going through an economically difficult period. And in Tallinn, Estonia, monthly rents start at €350 for a furnished studio and public transport is free for residents. Yes, free.

If millennials are worried that moving overseas to save money would upset their parents then it could be worth having a conversation with them.

Research commissioned by Gocompare.com Money shows that parents of young adults are concerned their children have a better chance of inheriting a home than buying one. Which is rather bleak, when you think about it.

But one in 10 parents say they would consider encouraging their children to emigrate and buy abroad if it meant they could finally afford to get their feet on the property ladder.

The cost of moving to save costs

Of course, many people might dream of moving but assume they simply can’t afford to. It’s not cheap to pack up an entire life and move it abroad.

MoveHub reports that established international removal firms usually have a regular schedule for removals into Europe, usually weekly or fortnightly. It says that a removal lorry can usually accommodate the contents of an average three-bedroom home.

The cost will vary but for a full 40-foot shipping container it’s likely to cost between £5,000 and £7,000.

Add to that, insurance, the cost of packing and unpacking, and potentially cargo inspection fees, local import duties and other local taxes. The cost will depend on how much there is to move and where it’s going.

Whatever the statistics on reasons for moving abroad show, a quick check of Google’s predictive search shows that many people are interested in saving money, although not always in a completely legitimate way.

Type “move abroad to” and the search engine’s popular searches include “avoid student loans”, “avoid capital gains tax” and “avoid inheritance tax”.

Clearly many people are searching for a sunnier financial outlook as well as better weather.