March 19, 2014 by
When it comes to the cost of living in Portugal, I must confess that I have often been “that guy” on the expat forums, telling prospective immigrants to Portugal that they shouldn’t be under any illusions that Portugal is a cheap place to live.
In many ways, it’s not. Petrol costs more than it does in the UK (seriously), and the price of cars is truly shocking. Utility bills are often higher too—we have to keep our homes warm in winter and cool in summer.
HOWEVER: The other night I thought of all of this in another way.
Portugal Cost of Living
So far this year, my wife and I have done OK. My wife, especially, has carved out a very successful freelance career since her redundancy just over a year ago. We feel “comfortable,” but when I actually do the sums, we’re not even approaching the income we had in London back in 2009.
But then I thought about it another way. In London, our rent was £1250 per month. Where we live now costs €450 (£375)…and this place is enormous by comparison.
So, we save £875 per month, just in rent. That’s £10,500 per year.
We also lived in the London borough with the second highest council tax. That was another £200 per month. Yep, that’s another £2,400 per year. We don’t pay any here.
As we lived in “outer London,” we also had to pay for an annual travelcard to get to work. This one really will blow your mind: £2288 each–£4,576. Let’s face it, that’s basically five grand. Here, we work from home.
Sadly not everyone can work from home in Portugal
So what do we save every year on these things alone? £17,476. And we needed all that money AFTER tax. With tax taken into account, we’re talking about the equivalent of just a little below an entire UK average wage.
That’s quite impressive already, as an annual saving. Obviously the balance is redressed somewhat by the fact that our income tax is a little higher BUT, consider this:
- A beer after work? That used to cost me £3.50 (€4.20). Now it costs a Euro.
- Cigarettes that cost £8.50 (€10!) in the UK cost €4 here.
- You can get a good meal out for €8.
- Nobody in Portugal would have the audacity to charge you to park in a shopping centre car park.
Beer IS cheap in Portugal
I’m not going to add up the totals from above. If I did, I’d have to be honest about my personal consumption of beer and cigarettes – with you, and with myself! However, it’s clear that in many ways, life in Portugal is, indeed, cheaper.
Now of course this doesn’t mean life here is easy. Building up our freelance incomes has been a seriously hard slog, and we have both done plenty of assignments at rates that wouldn’t even come close to a UK minimum wage. However, now we’ve paid our dues and proved ourselves, we do OK.
Before I finish this post, I must state some caveats, however. If I didn’t, I’d be painting an irresponsibly positive picture of how expat life can be. Consider the following:
1. Not everyone can start a freelance career from nothing. My wife and I are both fortunate that we have skills and experience that translate well to home working. If you don’t have these skills, you should disregard everything I’ve written here and pay attention to the fact that many people in Portugal earn little more than €500 per month before tax if they speak Portuguese and manage to find a job.
2. The comparisons I make are with London life and Algarve life. Few places are as expensive as London, so the net saving for many people will actually be substantially lower than ours.
Even so, working out these figures has given us a huge reason to be cheerful. Even if the numbers on our spreadsheets still look rather pitiful compared to the numbers we had when we lived in the UK, the one thing that’s for sure is that we feel we get far more LIFE for our money. And surely that’s what our move to Portugal was supposed to be all about?
If you want to find out more about the cost of living in Portugal, check out this article.
For even more about the practicalities of life in the sun, please consider buying a copy of our book:
Moving to Portugal: How a young couple started a new life in the sun – and how you could do the same
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