Ultimate guide to retire in the sun: How to beat hidden inheritance tax and pension traps, over-hyped locations to avoid and EXACTLY how much money you need. Plus my hidden gems in Spain, France and Portugal, by LIZ ROWLINSON editor of A Place In The Sun

Last week’s heatwave has given us a taste of a life lived in the sun, from al fresco lunches to long evenings spent outdoors.

It’s tempting to imagine how enjoyable life could be if that were the norm – with fewer grey wintry days to boot.

But it’s not just the weather pushing everyone from pensioners to ambitious under-35s and squeezed young families to consider whether they could be better off if they moved abroad. Many are also investigating whether their savings or pensions might stretch further.

A decent lifestyle in retirement requires an annual income of £31,700 in the UK for a single person and £43,900 for a couple, according to industry guidelines set by Pensions UK.

Life has certainly been getting more expensive in the UK. House prices are still rising – up 1.5 per cent on a year ago, according to the latest data from property website Zoopla. Inflation remains stubbornly high and last week’s news that energy bills will rise by £221 a year in July came as the latest blow to household finances. Workers also face a high tax burden on any income they make.

Moving to Europe, even post Brexit, is not as expensive or as difficult as many assume.

France, Spain and Portugal have long been firm favourites for Britons seeking a cheaper and sunnier life abroad.

In these three, UK pensioners can use an S1 certificate (available free from the NHS) to access heavily subsidised local state healthcare on the same basis as locals.

In the past five years, a whole network of hand-holding companies has sprung up to advise on the paperwork and taxation involved in a relocation.

So if you want to embrace a Mediterranean lifestyle – and get more house for your money – here’s everything you need to know to set up a new life in France, Spain or Portugal, from visas to tax systems.

Spain

Offering cheap property and Anglo-friendly seaside resorts, Spain remains the top retirement choice for the British.

More than 100,000 UK state pensions are paid to expats in Spain, according to the Office for National Statistics, with Valencia and Andalusia the most popular regions.

Post Brexit, UK nationals are still the biggest group of foreign buyers in Spain, according to the latest figures, despite having fallen slightly this year.

Property prices are going up across Spain, but your money still goes a long way in locations such as Alicante in Costa Blanca, which is home to the largest number of British residents in any province in Spain.

In Calpe you can find a four-bedroom villa with private pool for €445,000 (£385,500). You’ll get a townhouse on the southern end of Costa Blanca for less than €200,000 (£173,000), or a three-bedroom villa with a pool in the buzzy resort of Ciudad Quesada for €475,000 (£411,500).

For more authentic charm, the small town of Benijofar nearby has become incredibly popular for buyers relocating, according to the estate agent MASA International.

Retirees tend to gravitate to locations ten to 15 minutes inland – as Benijofar is – to avoid being in the seaside resorts but still near towns, golf courses, supermarkets and other facilities. The key is to experience areas at different times of year, as somewhere that appears attractive in the height of summer may feel very different in winter.

Gran Alacant, south of Alicante, has long been overlooked but is great for easy access to the airport and the city’s vibrant restaurant scene. Those seeking extra value are looking to Murcia, further inland, at towns such as Los Alcazares on the Mar Menor, where you can find a two-bedroom townhouse for €169,900 (£147,200).

Prices are higher on the Costa del Sol, especially around the expensive ‘Golden Mile’ near Marbella, but areas to the west such as Estepona and La Duquesa offer better value and are on the up – a large two-bedroom apartment on La Duquesa is for sale at €269,000 (£233,000).

Spain’s Left-wing politicians have repeatedly attempted to curb the number of overseas buyers and expats flocking to its shores. In February, nationalists in the Balearic Islands tried to ban Britons from buying a second home or retirement property on the popular islands of Majorca, Menorca and Ibiza. The proposals were rejected, but they were the latest in a long series of anti-tourism measures.

You need to budget for 10 to 14 per cent purchase costs in Spain, but if you want to get a mortgage, fixed-rate deals are only 2.5 to 3.5 per cent, plus the buying process is quicker than the UK – usually six to ten weeks. Purchase taxes vary by region, as do levels of inheritance tax. You must also use a good lawyer to check any issues around illegal extensions or changes made to the property.

Be aware that tax rules on worldwide income might mean that if you sell your UK home after becoming tax resident in Spain, you may be liable for Spanish capital gains tax.

Pensioners enjoy discounts on transport, entertainment and holidays, and the cost of living is 33 per cent lower than the UK. So although Spain does not offer flat-tax incentives for retirees, affordable levels of tax and savings on healthcare (via the S1) help mitigate this.

The so-called ‘Non-Lucrative Visa’ has been the route that non-working Britons use to move to Spain – hundreds have done so since Brexit. It is not difficult to obtain with a relocation company helping you through the paperwork.

This visa is applied for in the UK, before you leave – it takes three to six months to sort out in practice.

You are required to show you have access to €28,800 per year or €35,000 per couple (about £25,000 and £30,000 respectively), which can be a mix of savings, rental income, pension income, dividends and any other forms of income or savings. Allow around £1,000 per person for admin costs and professional help applying.

After five years of living in Spain you can apply for permanent residency, and you will no longer need to demonstrate a set level of annual income.

France

With a high quality of life and a huge choice of affordable properties – as well as being on our doorstep – France remains a relocation hotspot.

Traditional villages with petanque pistes, weekly markets and music festivals provide a gentler way of life.

Easy journeys back to the UK by car make the northern half of France especially practical, not least as summers in the south are too hot for some.

More than 8,000 Britons applied for first-time residency permits last year, according to the French government, many of whom were retirees.

Established expat communities are largest in the Dordogne, Charente and Occitanie (around Toulouse) but also Brittany and Normandy.

Village life, with a boulangerie or bistro within an easy stroll, is usually the pull – and you can find homes from under €100,000 (£86,000) in small hamlets that are a little off the beaten track.

In the less populated Limousin you can find a two-bedroom detached house with lovely garden for as little as €147,150 (£127,500), or a four-bedroom detached cottage in a pretty lakeside village in Brittany for €263,165 (£228,000).

If you really want to entertain the whole family in style, a five-bedroom so-called ‘maison de maitre’ with private heated swimming pool in the Charente-Maritime is just €495,000 (£429,000) – and the Atlantic coast is not far off.

The cost of living in France is pretty much on a par with the UK, although food is often more expensive though typically of better quality.

Budget for buying costs of 7 to 8 per cent on a resale property, and mortgage rates are just over 4 per cent for non-residents. It is best to own a property jointly and make a separate will for your property to mitigate future French inheritance taxes and ‘forced heirship’ inheritance rules.

In France, these rules prevent you from disinheriting your children – a mandatory minimum percentage of your worldwide estate is automatically set aside for them. This share will depend on the number of children you have – where there is just one, 50 per cent of the estate is reserved, two-thirds must be allocated to two children and three quarters where someone has three or more children. You can distribute the remainder as you wish, to a spouse, for example or specify a larger percentage should go to your children.

You can opt out of this, however, by stating in your will that you wish for the law of your nationality to apply to your estate.

Unless you have an EU passport – or your spouse has one – retirees in France typically apply for a long-stay visa valid as a residence permit – a ‘VLS-TS’. The cost is around £130 per person for fees, but other costs push it up to around £250. If you get professional help that will cost more.

You need to show you have a joint gross annual income of €30,000 (£25,992), or €22,000 (£19,000) for a single person.

A British couple who receive the full annual state pension of £12,548 each would need just an extra £896 a year from private pensions to qualify.

France does not offer specific tax benefits for retirees, and French standard income tax bands are similar to those of the UK. You do not pay tax on the first €11,600 of income, above which tax is levied at a rate of 11 per cent up to €29,579.

Earnings above this are taxed at 30 per cent up to €84,577. Taxpayers are charged 41 per cent tax between €84,578 and €181,917 and 45 per cent tax on anything exceeding this.

Good-quality state healthcare is an attraction, even though it is not completely free: the S1 covers most costs but many people opt for a top up private health policy (mutuelle) to cover shortfalls – around £50 to £90 per month for under-75s, according to relocation advisory service Navigate France.

Portugal

A relaxed lifestyle and widely spoken English are all big attractions for retirees considering a move to Portugal. Coastlines of beautiful beaches, established expat communities and a low cost of living also beguile.

Portugal’s population of foreign retirees has doubled in a decade, with the British accounting for 19 per cent, according to the Portuguese Statistics Department.

In 2025 there were 48,238 UK nationals resident in Portugal.

We have had a ‘perpetual friendship’ with the Portuguese since an alliance was signed in 1373, and the country has done much post Brexit to make the British feel welcome (unlike the government of its neighbour Spain). It’s a small country, and expat interest is still mostly focused on the Algarve, according to data from the Moving To Portugal Show in March, an event organised by the Portuguese Chamber of Commerce in the UK. Of prospective movers, 55 per cent were keen on the Algarve, which offers the best climate, expat communities and wider choice of residential resorts.

The Greater Lisbon area is also popular, and the Chamber says interest is ‘gradually expanding’ across other parts of the country.

Property prices in Portugal have risen by around 16.8 per cent in the past year, according to the INE, the statistics office – and by about 90 per cent since 2019.

On the Algarve, you’ll now need at least €200,000 (£173,000) for a small apartment if you want to be near the coast. In the year-round hub of Lagos, on the western Algarve, a cute one-bed traditional house in the historic centre will cost €295,000 (£255,600), while a large modern two-bedroom apartment in the popular Meia Praia beach neighbourhood is €389,000 (£337,000). You need to budget for 8 per cent purchase costs on a resale property.

Living inland from the coast in towns or villages that are less affected by seasonal tourism can be better for full-time residents, and with lower prices too. As with Spain, use a lawyer to check for any irregularities on a property, especially rural ones.

Popular locations include Loule, Monchique, Boliqueime and Silves, where it’s possible to find a small townhouse for around €200,000 (£173,000), or a three-bedroom home for around €270,000 (£233,000).

With the average property in Portugal at around €150,000 (£130,000), according to Idealista, areas of central Portugal growing in interest include Tomar, Coimbra and Castelo Branco – with fixer-uppers available for less than €100,000 (£86,000).

Retirees in Portugal can live comfortably on €1,300 (£1,130) to €1,500 (£1,300) per month, according to the relocation advisory company Global Citizen Solutions.

The cost of living in Portugal is 37 per cent lower than the UK, according to data website Numbeo.com. Over-65s get half-price train and bus fares. Healthcare is another box tick. Many private clinics have English-speaking doctors and modest fees – access to state healthcare is via the S1 certificate.

The Portuguese D7 visa is one of the most flexible and affordable visas in Europe for those moving to Portugal without a job.

You need to prove passive sources of income of at least €11,040 (£9,565) per year for a single person, or €16,560 (£14,240) for a married couple – less than the full state pension. Passive means pensions, savings income, dividends and rentals.

The visa is applied for in the UK from the Portuguese consulates and costs around £175.

Portugal has ended its tax-friendly scheme for retirees, so pensions are now taxed at standard income tax rates, from 12.5 per cent on the first €8,342 of income, rising progressively to a top rate of 48 per cent on income of €81,994 or more.

Inheritance and gifts tax have been abolished in Portugal but a stamp duty charge of 10 per cent applies on the transfer of assets on death, but only assets in Portugal, such as a property or car.

Liz Rowlinson is Editor of A Place In The Sun magazine.