The dream of moving abroad often starts with sunshine and a more relaxed lifestyle. But one of the first serious questions every buyer asks is: what will it cost to live there? For the retired, will their pension stretch further? For families, will they be able to afford a bigger home and garden for the kids to grow up in?
It’s a fair question – and the answer varies enormously. Our 2026 Cost of Living Index – the latest edition of our annual cost of living comparison – prices a basket of over 50 everyday items across 12 popular destinations, all converted to pounds sterling so you can compare them directly with the UK.
The results show that your money can stretch significantly further in southern Europe, while some English-speaking favourites may cost you more than staying put. (Although bear in mind that those countries may offer higher wages and lower taxes too).
Key takeaway: Spain, Portugal and Greece remain the most affordable destinations for British buyers in 2026, costing 24–32% less than the UK across six spending categories.
Australia and the USA are the most expensive, roughly matching UK costs overall. Dubai and Ireland sit in between.
Contents
The overall picture – how 12 countries compare with the UK
We priced the same basket of goods and services in every country. It's a representative monthly shopping basket for one person, allowing for all expenses except the home you will live in.
Then it's all converted to sterling using the ECB reference rate (€1 = £0.8677). The UK basket came to £1,218. Here's how each destination compared.
| Country | Basket total | vs UK |
|---|---|---|
| Spain | £833 | 32% cheaper |
| Portugal | £861 | 29% cheaper |
| Italy | £914 | 25% cheaper |
| Greece | £925 | 24% cheaper |
| Malta | £930 | 24% cheaper |
| France | £980 | 20% cheaper |
| Cyprus | £1,007 | 17% cheaper |
| Dubai | £1,113 | 9% cheaper |
| Ireland | £1,130 | 7% cheaper |
| New Zealand | £1,158 | 5% cheaper |
| UK | £1,218 | — |
| USA | £1,237 | 2% more expensive |
| Australia | £1,238 | 2% more expensive |
The headline is clear: every European destination in our index is cheaper than the UK, with Spain leading the field at 32% less.
But those overall figures hide some interesting category-by-category variation – and eurozone inflation now running below the UK's rate means the gap is, if anything, widening slightly. France, for example, is 24% cheaper than the UK for supermarket shopping but only 9% cheaper for home-running costs. Dubai is 35% cheaper for household goods yet 40% more expensive for healthcare items.
Grocery shopping
Includes representative items, including bread, butter, milk, eggs, fruit and veg, coffee, meat, wine and spirits, ice cream, chocolate, bottled water, laundry tablets and dog food (18 items).
On the whole we chose mid-range supermarket prices, but there are some market items where that is a more normal way of shopping.
| Country | Basket total | vs UK |
|---|---|---|
| Greece | £161 | 25% cheaper |
| France | £164 | 24% cheaper |
| Italy | £166 | 23% cheaper |
| Spain | £167 | 22% cheaper |
| Portugal | £177 | 18% cheaper |
| Ireland | £190 | 12% cheaper |
| New Zealand | £199 | 7% cheaper |
| Cyprus | £208 | 3% cheaper |
| Malta | £215 | level |
| UK | £215 | — |
| Dubai | £217 | 1% more expensive |
| USA | £232 | 8% more expensive |
| Australia | £249 | 16% more expensive |
The Mediterranean group dominates here, thanks to cheaper fresh produce and wine. Overseas residents who cook at home regularly will feel the biggest savings in Greece, France and Spain. Smaller islands such as Cyprus and Malta, and more out of the way locations like Dubai and Australia are notably expensive for groceries – partly reflecting their geographic isolation and transport costs.
Travel and transport
Includes: unleaded petrol per litre, one-week car hire, return flight to London and local public transport off-peak (four items). We allowed for more trips home from closer countries to the UK.
| Country | Basket total | vs UK |
|---|---|---|
| Malta | £92 | 48% cheaper |
| Portugal | £106 | 40% cheaper |
| Cyprus | £123 | 31% cheaper |
| Italy | £128 | 28% cheaper |
| Greece | £130 | 27% cheaper |
| Spain | £139 | 21% cheaper |
| Dubai | £151 | 15% cheaper |
| Ireland | £172 | 3% cheaper |
| UK | £177 | — |
| France | £181 | 3% more expensive |
| USA | £185 | 5% more expensive |
| New Zealand | £196 | 11% more expensive |
| Australia | £206 | 16% more expensive |
Malta's small size and subsidised public transport make it the cheapest for getting around. Fuel costs are much of a muchness within Europe but much cheaper in larger countries (and those with their own oil fields!). Car hire is very much question of shopping around as we found huge disparity here, while local public transport is something that will get cheaper as you live there and work out the cheaper options.
Running a home
Includes: domestic cleaner, paint, Ikea essentials, Sony TV, air fryer, iPhone 17 contract and electricity including standing charge (seven items).
| Country | Basket total | vs UK |
|---|---|---|
| Dubai | £161 | 35% cheaper |
| Spain | £169 | 32% cheaper |
| Malta | £197 | 20% cheaper |
| Italy | £208 | 16% cheaper |
| Greece | £211 | 15% cheaper |
| Portugal | £221 | 11% cheaper |
| France | £225 | 9% cheaper |
| Cyprus | £230 | 7% cheaper |
| USA | £234 | 6% cheaper |
| UK | £247 | — |
| Ireland | £250 | 1% more expensive |
| Australia | £253 | 2% more expensive |
| New Zealand | £257 | 4% more expensive |
Dubai leads this category thanks to low electricity costs and ready availability of domestic help. Spain was simply inexpensive across all items. It won't come as a surprise to Brits to hear that our electricity is expensive but we're competitive on decorating materials (so long as you steer clear of the Farrow & Ball). You might be surprised at how Ikea prices vary between countries for the same item. For a full breakdown of ongoing costs in Spain, see our guide to Spain property buying costs.
Leisure and eating out
Includes: cappuccino and croissant, Big Mac meal, beer and wine, eating out, cinema ticket, Netflix, newspaper, half-marathon entry, paperback book and video games (13 items).
Although we include alcohol, only in quantities that would keep you below the recommended 14 units per week.
| Country | Basket total | vs UK |
|---|---|---|
| Spain | £253 | 44% cheaper |
| Portugal | £267 | 41% cheaper |
| Italy | £282 | 37% cheaper |
| France | £292 | 35% cheaper |
| Malta | £320 | 29% cheaper |
| Greece | £321 | 28% cheaper |
| Cyprus | £339 | 24% cheaper |
| New Zealand | £383 | 15% cheaper |
| Ireland | £392 | 13% cheaper |
| Australia | £391 | 13% cheaper |
| USA | £426 | 5% cheaper |
| Dubai | £434 | 3% cheaper |
| UK | £448 | — |
If retiring overseas, you want to enjoy life even on a lower income. The good news – this is the category where moving abroad makes the biggest day-to-day difference. A three-course meal in a mid-range restaurant in Spain costs roughly half the UK equivalent. Even Dubai and the USA, the two most expensive destinations overall, are cheaper than Britain for leisure spending. If eating out, enjoying a coffee in a local square and visiting the cinema are part of your retirement plans, the savings abroad are real and significant. Our guide to the top overseas property destinations in 2026 highlights where lifestyle value and property prices intersect.
Healthcare basics
Includes: dental check-up, weight loss drugs, nappies, painkillers and sun cream (five items). An addition this year was the weight loss drug Tirzepatide (marketed as Mounjaro).
Like all our items, whether you use that particlar drug or not, they act as a proxy for other medicines that you might be taking. A word of caution here: this category does not cover the cost of health insurance, which is a requirement for most visas but can vary wildly between individuals.
| Country | Basket total | vs UK |
|---|---|---|
| Cyprus | £31 | 34% cheaper |
| Portugal | £44 | 6% cheaper |
| UK | £47 | — |
| Spain | £48 | 2% more expensive |
| Greece | £49 | 4% more expensive |
| France | £50 | 6% more expensive |
| Malta | £50 | 6% more expensive |
| New Zealand | £53 | 13% more expensive |
| Ireland | £58 | 23% more expensive |
| Italy | £59 | 26% more expensive |
| Australia | £59 | 26% more expensive |
| Dubai | £66 | 40% more expensive |
| USA | £77 | 64% more expensive |
You will need to speak to a specialist about health insurance before you move. Dubai's higher costs partly reflect the price of branded medicines, while the USA's position at the top underlines why health insurance planning is so important for buyers considering Florida or other American states. The price of UK dentistry looks like something of a scandal, but if you do have to suffer toothache at least our painkillers are supercheap.
Services and personal spending
Includes: clothing (jeans), hotels, dog grooming and men's haircut.
| Country | Basket total | vs UK |
|---|---|---|
| Portugal | £46 | 44% cheaper |
| Greece | £52 | 38% cheaper |
| Spain | £57 | 32% cheaper |
| Malta | £57 | 31% cheaper |
| France | £69 | 18% cheaper |
| Ireland | £67 | 20% cheaper |
| New Zealand | £69 | 17% cheaper |
| Italy | £72 | 14% cheaper |
| Cyprus | £76 | 9% cheaper |
| Australia | £81 | 3% cheaper |
| Dubai | £83 | 1% cheaper |
| USA | £83 | 1% cheaper |
| UK | £84 | — |
Portugal and Spain stand out for affordable personal services. There were wide differences for getting your cockapoo a wash and fluff up, with the UK and Dubai leading the pack. Dubai also has expensive clothes, so it's just as well that you won't need to wear as many to keep warm. A men's haircut has a surprising range of prices and explains why so many Australians appear to cut their own.
Currency and the bigger picture
Our index converts every price to sterling as of mid-March 2026. But exchange rates shift constantly, and a weakening pound means your UK pension or savings buy less abroad.
In March 2026, £1 buys roughly €1.15 – still well below the €1.30 it fetched before the 2016 referendum. For a pensioner receiving £1,500 per month and spending in euros, that's a difference of around €225 every month compared with a decade ago. Many buyers we help use a currency specialist to lock in favourable rates and set up regular transfers, reducing the risk of exchange rate swings eating into their budget.
It's also worth noting that our basket doesn't include rent or mortgage payments as the majorty of our readers will be homeowners. Another important cost not included is the equivalent of council tax in the UK, or private health insurance premiums. These vary hugely by country and region, and can significantly change the picture – our guide to overseas property taxes is a good place to start.
What should I do next?
What would your UK spending cost abroad?
Based on the YOH Cost of Living Index 2026
If you're weighing up where to buy, start by comparing the countries that interest you most. Our country buying guides for Spain, Portugal, France, Italy, Greece, Cyprus and Dubai cover costs, process and visa rules in detail.
If currency is on your mind – and it should be when you're spending in a different currency to your income – speak to a currency specialist about setting up a forward contract or regular payment plan.
You can also join one of our free events and webinars to put your questions directly to property lawyers, tax advisers and currency experts. And if you'd like to talk through your options with someone who knows the market, find an expert through our free matching service.
Summary
Spain is the cheapest destination in our 2026 index at 32% below UK costs, followed by Portugal (29% cheaper) and Italy (25% cheaper). The biggest savings come in leisure and eating out, where every destination – even the USA and Dubai – beats the UK. Supermarket shopping is 22–25% cheaper across the Mediterranean.
Australia and the USA are the only two countries that match or exceed UK costs overall, with healthcare items notably more expensive in both. Currency fluctuations remain a genuine risk for anyone living off a UK pension abroad, and the pound's post-referendum weakness against the euro continues to reduce purchasing power in the eurozone.
Frequently asked questions
In our 2026 index, Spain tops the list at a third cheaper than the UK overall. Portugal follows closely at 29% cheaper. Both countries also have well-established British communities and clear property-buying processes, making them practical choices as well as affordable ones. Browse properties for sale in Spain or properties for sale in Portugal to see what's on the market.
On everyday spending, yes – our basket came in 9% cheaper than the UK. However, don't be put off! Dubai's zero income tax can still mean that you have better purchasing power in the emirate.
If your income is in pounds but your expenditure in euros or dollars, the exchange rate will significantly impact your purchasing power. When going to press pound buys around €1.15, but over the past ten years it has bought as many as €1.32 and €1.06. For someone receiving a £1,500 monthly pension and spending in euros, that meads a variation of costs around €400 per month and can make budgeting difficult. Using a currency specialist lime Smart Currency Exchange to lock in rates or set up regular transfers will manage this risk.
Our index puts France at 20% cheaper overall, though the savings are unevenly spread. Supermarket shopping and eating out are 24–35% cheaper, but travel costs roughly match the UK and healthcare items are 6% more expensive. Rural France and smaller cities offer significantly better value than Paris or the Côte d'Azur. For a detailed look at property-specific expenses, see our guide to the costs of buying property in France.
In most European destinations, yes. Our representative monthly shopping trolley for one in Greece, France, Italy and Spain was each around £50 cheaper for supermarket and market shopping than the UK. The main exceptions were small islands which import plenty of produce, plus Australia (16% more expensive). Apart from those, cooking at home and keeping your house clean are where you'll feel the biggest difference.
Our basket covers everyday items you would need to set up your home, buy regularly and need to live there. It doesn't housing costs as most of our readers are homeowners, nor health insurance. Our country buying guides cover property-specific costs in detail.
Yes! Many of us wouldn't think of living without our pets, so we include pet grooming and pet food. Although we do not include veternary costs, the evidence is that these essential costs are extremely high in the UK.
Sources
- YOH Cost of Living Index 2026 – original price research conducted by Your Overseas Home across 12 countries, January 2026. ECB reference rate: €1 = £0.8677
- Eurostat – euro area annual inflation data, December 2025 and January 2026 releases
- Cyprus Statistical Service – Consumer Price Index, December 2025
- Numbeo Cost of Living Index – country-level comparison data, 2025/2026
- Mercer Cost of Living City Ranking – 2024 global city survey
Prices were collected in January 2026 and converted to sterling at the stated ECB rate. All prices reflect standard retail costs without promotional discounts. Trust markers: add author name, published date and last-updated date before publishing.
