How To Retire In Portugal

We've put together a step-by-step guide to retiring in Portugal.

First, Why Portugal?

A one-bedroom city centre apartment in the UK will cost you upwards of £745 (unless you're planning on going rural). In contrast, the same apartment, arguably with a better view, will only set you back £510 monthly in Portugal. Our research shows that those of you looking to retire are more likely to purchase a property instead to rent one, so we're pleased to let you know buying a property in Portugal will cost you 50% less than one in the UK on average.

If you've ever visited a tourism website, then you've likely been bombarded with images of Portugal's beautiful coastlines. It is one of the most beautiful places to live with a fantastic mixture of coasts and beaches that are almost constantly favoured by a warm sun. The weather great the winters are relatively mild compared to the cold and dark UK ones.

Portugal is a popular holiday and retirement destination because of its stunning views and great weather, and the low cost of living holidaying there. If you're eating out in the UK, you're likely to be shelling out around £50 for a three-course meal per person. Combatively, the same meal (but spicier) will cost you £26 in Portugal. If you're a fan of milk, then you'll be pleased to hear that a pint will cost you 55p, and beer will only cost you around £1.74.

So, the milk and beer pint rates have convinced you, but where should you go? Here are our top picks for Portugal destinations for retirement!

Home of beautiful coasts and beaches, this is one of the most popular locations for holidaying Brits. Whether you're looking for vibrant and culture-filled coastal towns or you want to settle in calmer quaint countryside villages, you're in the right place. It's not only incredibly affordable, but it is also famous for its clear seas and tan-friendly sun. There's only one downside that we can sea (get the pun?), and it's the fact that you're going to have to share! There will be many tourists wanting to visit during the summer so you may find that it is jam-packed.

We love the capital of Portugal for its combination of the wonderfully sunny Portugal climate with an abundance of bars, restaurants and cafes, and it's also only a short drive to the gorgeous beaches and coastlines nearby. If you're retiring, then you may not be too impressed by the hills that Lisbon boasts. It's certainly great for maintaining fitness, but it also has an excellent public transport system if you think you'll get bored of the daily hikes quickly

If you've ever seen a picture of a colourful landscape, then it may have been taken in Porto. As the second-largest city in Portugal, it has an ever-growing British population that benefits from Porto's famous city centre's culture and history. Unlike Lisbon, it's excellent for taking relaxed walks, especially to a local vineyard for some world-famous wine or traditional entertainment. If you want sun and sea without sweat, Porto is good for you as its climate is slightly more relaxed than other parts of Portugal. It's important to note that property prices are somewhat higher in the city centre, but the outskirts are just as affordable as the rest of Portugal.

It's green, it's sunny, and it's full of delicious food. It's Madeira! It has a relatively consistent climate all year round and has a growing British community attracted to Madeira by its outstanding natural beauty. Unfortunately, it's slightly more expensive than the other places we have recommended, and you will be bombarded with tourists in the summer (me included!)

   •   Pensions

So far, Brexit hasn't changed the fact that you can claim your UK state pension in Portugal, and you can still transfer any personal pensions too. If you want to avoid high taxes, you might want to look into a QROPS (Qualifying Recognized Overseas Pension Scheme). Alternatively, if you've worked in Portugal and made social security contributions for at least 15 years, then you might be able to claim the Portuguese state pension too.

   •   Taxes

When you move, you may become a resident of Portugal, which means you're subject to paying tax on all global income. Non-resident only have to pay tax on the income they earn inside the country. Paying tax means you'll need to register to NIF. To become a resident, you'll need a temporary residence permit for five years, after which you can be considered for a permanent residence.

   •   Healthcare

The UK has one of the best healthcare systems in the world, so you'll want to make sure that your place of retirement can match that. Once you become a resident, you can access the Portuguese national health service (SNS), and you can benefit from low-cost healthcare if you receive a UK pension that you can also apply for the UK to cover the cost of your state healthcare.

Retirement Visas:

This is a fixed residency visa that applies to over a year when retirement is the primary motivation for your move. To apply, you'll need;

   •   Complete application form

   •   Valid UK passport

   •   Two current passport photographs

   •   Valid travel insurance (with medical coverage)

   •   Criminal record certificate from the UK police

   •   Proof that you can financially support yourself

   •   Documents relating to the type of retirement income you'll be using

Even when you have your residency visa, you'll need to apply for a residency permit with Immigration and Border Services (SEF) within four months of your arrival.

This visa scheme is designed for non-EU applicants (thank you, Brexit!). However, the criteria for this visa are much stricter.

   •   Invest at least €1 million into Portugal.

   •   Create at least ten jobs.

   •   Buy a property of at least €500,000.

   •   Invest at least €250,000 in Portuguese arts, culture or heritage, or €350,000 in scientific research.

   •   Invest at least €500,000 in local small or medium-sized businesses.

Even when you are approved for this visa, you only get a temporary residence permit for a year, leading to a permanent residence application after five years and citizenship after six years.

To conclude:

   6.   Apply for your visa.

   7.   Find somewhere to live.

   8.   Tell HMRC that you're leaving the UK

   9.   Arrange to have your belongings shipped to Portugal.

   10.   Apply for a residency permit. Register for healthcare.

   11.   Apply for a (NIF).

And don’t forget to use your Kixy account while you go through your move, especially when you purchase a property! You won’t find cheaper transfers or exchange rates anywhere else.

Information in this publication is provided for general information only, and it does not purport to include every aspect of the topics with which it deals. You should not take it as advice. Prior to taking, or refraining from taking, any action based on the content of this publication, you should seek professional or specialist advice. Kixy LTD or its affiliates are not rendering legal, tax or other advice through the content of this publication. A similar outcome is not guaranteed. The content in the publication does not represent, warrant or guarantee, either expressly or impliedly, that it is current, accurate, complete, or up-to-date.