Exploring-the-Cost-of-Living-in-Portugal-vs-the-UK

When it comes to choosing to emigrate to another country, a comprehensive comparison to one of the most critical factors to consider is the cost of living. Portugal and the UK are popular destinations for expats and retirees, each offering a unique lifestyle and set of expenses. In this comprehensive comparison, Edwards European Moving delves into the intricacies of the cost of living in these two countries.

Housing Costs:

  1. Property Prices:
    • In the UK, property prices can vary greatly depending on the region. London, for example, is known for its sky-high property prices, while areas that are more rural are generally more affordable.
    • Portugal, on the other hand, offers more affordable property prices, with popular cities like Lisbon and Porto being considerably cheaper than their UK counterparts.

House Prices (2023):

Portugal:

  1. Lisbon: The average price of a 2-bedroom apartment in the city centre is around €350,000 to €500,000. In the suburbs, prices can be lower, ranging from €250,000 to €350,000.
  2. Porto: In Porto, the cost of a 2-bedroom apartment in the city centre ranges from €300,000 to €450,000. In suburban areas, prices can start at €200,000 and go up to €350,000.
  3. Algarve: The Algarve region offers a variety of property options. A 2-bedroom apartment in a popular coastal area can range from €300,000 to €450,000, while areas that are more rural may have prices starting at €200,000.

UK:

  1. London: London remains one of the most expensive cities in the world for property. The average price of a 2-bedroom apartment in the city centre can exceed £1 million, while suburban areas can still see prices well over £500,000.
  2. Manchester: In Manchester, a 2-bedroom apartment in the city centre can cost around £300,000 to £500,000. Suburban areas offer more affordable options, with prices starting around £200,000.
  3. Edinburgh: Edinburgh’s property market has been competitive. A 2-bedroom apartment in the city centre can range from £350,000 to £600,000, while suburban areas offer properties starting around £250,000.

 

Rental Prices (2023)::

    • Renting in the UK, particularly in major cities, can be expensive. London’s rent prices are among the highest in Europe.
    • Portugal, in comparison, offers more affordable rental options, making it an attractive choice for those seeking a cost-effective living arrangement.

Utilities and Services:

Monthly utility bill charges can vary depending on factors such as the size of your home, location, energy consumption, and personal usage habits. Here’s a rough estimate of what you might expect to pay for basic utilities in Portugal and the UK in 2023:

Portugal (Monthly Utility Bill Estimates for a 85 sqm Apartment):

  1. Electricity, Heating, Cooling, and Cooking (Electricity): €50 to €100
    • Portugal generally has a milder climate, so heating and cooling costs may be lower than in colder regions.
  2. Water and Sewage: €20 to €40
  3. Natural Gas (if applicable): €15 to €30
  4. Internet and Cable TV: €30 to €50
  5. Mobile Phone (1 person): €15 to €30

Total Monthly Utility Costs in Portugal: Approximately €130 to €250

UK (Monthly Utility Bill Estimates for a 85 sqm Apartment):

  1. Electricity, Heating, Cooling, and Cooking (Electricity and Gas): £70 to £150
    • The UK’s colder climate can result in higher heating costs during the winter months.
  2. Water and Sewage: £30 to £50
  3. Internet and Cable TV: £30 to £60
  4. Mobile Phone (1 person): £15 to £30

Total Monthly Utility Costs in the UK: Approximately £145 to £290

Please note that these are approximate estimates, and your actual utility bills may vary. Factors such as the energy efficiency of your home, the number of occupants, and your personal usage patterns can significantly affect your monthly expenses. Additionally, utility rates and service providers may change over time, so it’s advisable to check with local utility companies for the most accurate and up-to-date pricing information.

Internet and Mobile Services

Portugal (Internet and Mobile Services):

  1. Internet: Portugal offers a range of internet service providers (ISPs) offering various broadband and fibre-optic plans. Prices can vary depending on the speed and data limits of the plan. On average, you might pay:
    • Basic broadband (30-100 Mbps): €20 to €40 per month.
    • Fibre-optic broadband (100-1000 Mbps): €30 to €60 per month.
  2. Mobile Phone: Mobile phone plans in Portugal are available from several providers. Prices depend on the data, talk time, and text messages included in the plan. On average, you might pay:
    • Basic mobile plan with data (2-5 GB): €10 to €20 per month.
    • Comprehensive mobile plan with more data and international calls: €20 to €40 per month.

UK (Internet and Mobile Services):

  1. Internet: The UK has a competitive broadband market with various ISPs offering different plans. Prices can vary depending on the speed, data allowance, and contract length. On average, you might pay:
    • Basic broadband (30-100 Mbps): £20 to £40 per month.
    • Fibre-optic broadband (100-1000 Mbps): £30 to £60 per month.
  2. Mobile Phone: Mobile phone plans in the UK are available from multiple providers, and prices vary depending on the network, data allowance, and additional features. On average, you might pay:
    • Basic mobile plan with data (2-5 GB): £10 to £20 per month.
    • Comprehensive mobile plan with more data and international calls: £20 to £40 per month.

Please note that these are rough estimates, and actual prices may vary based on your location, specific service provider, and any promotional offers or bundles. Additionally, you may find pay-as-you-go and SIM-only plans that cater to different needs and budgets in both Portugal and the UK.

Transportation:

  1. Public Transportation:
    • Portugal’s public transportation system is efficient and cost-effective. Major cities like Lisbon and Porto have well-developed metro and bus networks.
    • In the UK, transportation costs can vary widely depending on location. London’s public transport system is extensive but pricey.
  2. Car Ownership:
    • The cost of owning and maintaining a car in the UK, including insurance and fuel, is generally higher than in Portugal.

Groceries and Dining:

  1. Groceries:
    • In Portugal, you’ll find that grocery prices are generally lower than in the UK, making everyday items more affordable.

Common Grocery Items (2023):

Portugal:

  1. Bread (1 loaf): €1 to €2
  2. Milk (1 litre): €0.70 to €1
  3. Eggs (12): €1.50 to €2.50
  4. Rice (1 kg): €1 to €2
  5. Chicken Breast (1 kg): €5 to €7
  6. Potatoes (1 kg): €1 to €2
  7. Tomatoes (1 kg): €1 to €2
  8. Apples (1 kg): €1.50 to €3
  9. Water (1.5-litre bottle): €0.50 to €1
  10. Coca-Cola (2-litre bottle): €1.50 to €2

UK:

  1. Bread (1 loaf): £0.80 to £1.50
  2. Milk (1 litre): £0.80 to £1
  3. Eggs (12): £2 to £3
  4. Rice (1 kg): £1 to £2
  5. Chicken Breast (1 kg): £7 to £10
  6. Potatoes (1 kg): £1 to £2
  7. Tomatoes (1 kg): £1.50 to £2.50
  8. Apples (1 kg): £1.50 to £2.50
  9. Water (1.5-litre bottle): £0.80 to £1
  10. Coca-Cola (2-litre bottle): £1 to £2

These prices give a general idea of the cost of living in both countries in 2023. Keep in mind that prices can vary based on location, brand, and individual shopping habits. Additionally, exchange rates can influence the cost for expatriates, so it’s essential to monitor these factors if you plan to live in or move to either Portugal or the UK.

  1. Dining Out:
    • Portugal offers an array of affordable dining options, from local cafes to fine restaurants.
    • The UK boasts a diverse culinary scene but is generally more expensive when dining out, particularly in major cities.

Healthcare:

  1. Healthcare Costs:
    • Both Portugal and the UK have reputable healthcare systems, with the UK’s NHS providing free healthcare to residents.
    • Expats in Portugal may need private health insurance, which can be affordable compared to the UK’s private healthcare costs.

Education:

  1. Education Expenses:
    • Public education in Portugal is free up to the secondary level, while the UK offers free public education as well.
    • Private education in both countries varies in cost but can be significantly cheaper in Portugal.

Salaries in Portugal Compare to the UK

Salaries in Portugal and the UK can vary significantly depending on factors such as occupation, location, experience, and industry. Generally, the UK tends to have higher average salaries compared to Portugal, but it’s essential to consider the cost of living and other factors when making comparisons. Here’s an overview of how salaries in these two countries compare:

Salaries in Portugal:

  1. Minimum Wage: As of 2022, the minimum wage in Portugal is €775 per month. This may increase in subsequent years.
  2. Average Salary: The average gross monthly salary in Portugal varies by industry and region. In major cities like Lisbon and Porto, you can expect higher salaries compared to rural areas. On average, it can range from €1,000 to €1,500 per month, but this can be higher in specialized professions and managerial positions.
  3. Skilled Professions: Professionals in fields such as IT, engineering, finance, and healthcare typically earn higher salaries, with some exceeding €2,000 to €3,000 per month.

Salaries in the UK:

  1. Minimum Wage: In the UK, the minimum wage varies depending on age and whether the worker is an apprentice. As of 2022, the minimum wage for workers aged 23 and older is £8.91 per hour.
  2. Average Salary: The average gross monthly salary in the UK is higher than in Portugal and can vary by region. In London and the South East, salaries tend to be higher due to the higher cost of living. On average, it can range from £2,000 to £3,000 per month.
  3. Skilled Professions: Skilled professionals in the UK, especially those in sectors like finance, technology, and healthcare, can earn significantly higher salaries. Some experienced professionals may earn £4,000 or more per month.

It’s important to note that while salaries in the UK are generally higher than in Portugal, the cost of living in the UK, especially in major cities like London, can be significantly higher as well. Housing, transportation, and healthcare costs in the UK may offset the higher salaries, making the comparison more nuanced.

Income Tax Comparisons

Income tax rates and structures can vary between Portugal and the UK, and they are influenced by factors such as income levels, tax brackets, and deductions. Here’s a comparison of income tax in both countries for the tax year 2023

Portugal:

  1. Individual Income Tax Rates (2023):
    • Up to €7,112: 14.5%
    • €7,113 to €10,732: 23%
    • €10,733 to €20,322: 28.5%
    • €20,323 to €25,075: 35%
    • Over €25,075: 45%
  2. Solidarity Surcharge: In Portugal, there’s an additional solidarity surcharge on high incomes, ranging from 2.5% to 5% on the portion of income exceeding €80,000 for singles or €160,000 for married couples.
  3. Deductions and Credits: Portugal offers various deductions and tax credits for specific expenses, such as health and education. These can reduce your taxable income.
  4. Capital Gains Tax: Capital gains are generally taxed at a flat rate of 28%, but there are exemptions for primary residences.

The UK:

  1. Individual Income Tax Rates (2023/24):
    • Up to £12,570: 0%
    • £12,571 to £50,270: 20%
    • £50,271 to £150,000: 40%
    • Over £150,000: 45%
  2. National Insurance Contributions (NICs): In addition to income tax, individuals in the UK pay National Insurance Contributions, which fund the country’s social security system. NICs are calculated as a percentage of your earnings, with different rates for employees and self-employed individuals.
  3. Deductions and Allowances: The UK offers various deductions and allowances, including a personal allowance (the amount you can earn before paying income tax) and specific allowances for things like savings and pensions.
  4. Capital Gains Tax: In the UK, the Capital Gains Tax rate depends on your total taxable income, with rates of 10% and 20% for basic-rate and higher-rate taxpayers, respectively. For residential property, rates are 18% and 28%.

It’s important to note that tax laws and rates can change from year to year, and there may be additional considerations, such as tax treaties and exemptions for certain types of income. To get an accurate picture of your tax liability in either Portugal or the UK, it’s advisable to consult with a tax professional or use official tax calculators provided by the respective tax authorities.

In this extensive comparison of the cost of living in Portugal and the UK, we’ve explored various aspects, from housing and utilities to transportation, groceries, and healthcare. While both countries offer unique opportunities and lifestyles, Portugal generally emerges as the more cost-effective choice for expats and retirees looking to stretch their budgets.

Ultimately, the choice between these two nations depends on various personal factors, such as lifestyle preferences, career opportunities, and individual financial situations. It’s essential to consider your specific needs and priorities before making the move to either Portugal or the UK.

Planning a Move to Portugal?

If you’re considering a move to Portugal, Edwards European Moving is here to provide you with exceptional removal services. Our professional team is well-versed in the intricacies of international relocations and has the expertise to handle all aspects of your move.

Our dedicated removals team will assist you throughout the entire process, from planning and packing to transportation and delivery. We carefully pack and load your belongings, ensuring their safe arrival. With our regular removals to Portugal, you can rely on us for timely and reliable transportation.

If you’re ready to embark on your journey to Portugal, contact Edwards European Moving today. Our dedicated team is eager to assist you with a personalised removal service tailored to your needs. Call us at 01953 718239 to discuss your requirements and receive a quotation. With Edwards European Moving, your move will be a seamless and memorable experience.

 

On 20th December 2023   /   cost of living, Cost of Living in Portugal vs the UK, Cost of living Portugal, cost of living UK, living in Portugal