Choosing where to settle down in your later years can be a tough decision. People don’t just pick where to retire based on desirability and proximity to friends and family anymore, but also consider other things like the level of well-being a city provides, and where they can be most financially stable.
There are currently between 200,000 and 250,000 British retirees living in Europe. But which city is the most desirable for pensioners and people approaching retirement age in 2023? And how does London and the UK compare?
Financial experts Money Minder looked at the 50 largest cities in Europe, and analysed eight different data points, including the available state pension allowance against the safety rate, cost of local transport and life expectancy to determine which cities offer the best experience for people who want to spend their leisure years overseas.
Some of the data has been collated using Numbeo, a worldwide cost repository that compiles cost-of-living, crime and safety data.
To fully understand the desirability of cities across Europe, we looked at the below points, to ensure the study reflected the needs and desires of retirees:
Lower costs are important for retirees who are trying to make their money work harder for them, and the cost of living is now a factor for many. Ensuring you have enough funds to fit your lifestyle and last throughout your retirement is imperative. A pension drawdown calculator can help you assess the risk of running down your pension funds too soon and to consider the pros and cons of putting in place a guaranteed income for life.
On top of this, other retirees will want to prioritise safety, leisure opportunities and having a long, enjoyable life.
Filled with green spaces it is already a popular city for people moving abroad with 20,000 newcomers arriving each year, and it was previously named as the world’s least stressful city.
Despite being one of the more expensive cities to purchase a house in our index, the state pension in Stuttgart is one of the highest, and life expectancy at age 65 is 19.7 years.
With its stunning natural beauty and good public healthcare, Helsinki comes in ninth place.
It is especially good for low crime rates, as Finland is often considered one of the safest countries in the world. There’s also a number of leisure options available in the city - along with public saunas dotted around.
Valencia is one of many Spanish cities in the top 10. With a history that spans over 2,000 years, it’s been voted the best city to live in twice - not surprising for the birthplace of paella.
Valencia sits in eighth place due to its low cost for groceries, high safety levels and the fact it’s one of the more affordable cities to purchase a house in.
Poland’s capital city and its largest city is brimming with parks and nature reserves, and is even home to 88 parks.
Warsaw boasts high safety figures for retirees, plus an average grocery basket costing less than €25. The cheaper cost of living is reflected in its state pension, which is one of the lowest, equating to just under €250 per month.
Zagreb,the largest city in Croatia, is also the most populated. The city has a rich and mesmerising history, and is also home to a large general hospital, Sveti Duh.
It’s sixth place in the index is due to relatively low house prices, good safety rates, and cheap transport - the average cost of a one-way ticket is €0.57.
Nicknamed the ‘jewel box’ of Germany this is a hidden gem, home to an abundance of elegant cultural and architectural treasures.
Dresden comes in fifth due to its low house prices and the best state pension - up to €2,100 per month.
The largest city in Andalusia, Seville is the birthplace of tapas, and enjoys sunshine all year long, with just 80 days of rainfall a year.
Seville also has low property prices in comparison to other cities on the index, and a high life expectancy rate at 20.5 years after the age of 65.
Malaga is one of the oldest cities in the world, and also has the warmest winters of all large European cities - the minimum temperature ever recorded is - 4°C!
Leisure opportunities are plentiful in Malaga, from its 14 leisure centres, 45 wineries and 40 museums, second only to Madrid, which conveniently comes in second place…
The Spanish capital city features high on the list for its quality of life, with low crime rates and lower transport and grocery costs than other citiesin our index.
The city in the northeastern region of Spain has a rich history and is home to a number of museums, monuments and attractions. While its other Spanish counterparts, such as Madrid and Barcelona, are more commonly known for their cathedrals, Zaragoza’s lesser known Basilica del Pilar boasts stunning baroque architecture and rich cultural heritage.
When looking at London in comparison to the 50 largest cities in Europe, it actually came last in the index. Highlighting how much the UK government may need to do to improve the lifestyle and wellbeing of British retirees, London fell short in all categories, due to its high house prices, relatively high crime rate, high cost of living and a lower minimum state pension than other cities.
The bottom ten included other capital cities including Paris, Athens and Rome, suggesting that pensioners will have a better retirement in cities with a quieter pace of life outside the hustle and bustle.
If you find yourself contemplating a future retirement overseas, and you have a defined contribution pension in the UK, you can opt to retain your pension fund in the UK and withdraw funds abroad, or you can move your pension pot with you, or even combine these options.
Should you decide to leave your pension pot in the UK and access your pension while abroad, you will still have access to the pension options available to UK residents.
However there also exists the potential to transfer your pension abroad with you, but you’ll need to ensure that you transfer the funds into a qualifying recognised overseas pensions scheme, or there’ll be a tax charge.
For those that have lived abroad or worked in another country for years, you may be able to contribute towards that country’s state pension scheme, along with a UK state pension.
However, while we’ve included the state pension allowance as part of this research, it varies between countries and between residents depending on how long they have lived and worked there. Therefore, we have based our index on the minimum state pension allowance an individual can receive in those countries.
No matter where you choose to retire, consider a pension drawdown calculator to understand how your pension fund can be used to provide you an income in retirement and allow your pension fund to grow while you take money out of it to enjoy your later years.
1 - Zaragoza
2 - Madrid
3 - Malaga
4 - Seville
5 - Dresden
6 - Zagreb
7 - Warsaw
8 - Valencia
9 - Helsinki
10 - Stuttgart
11 - Wroclaw
12 - Krakow
13 - Berlin
14 - Lisbon
15 - Poznan
16 - Bucharest
17 - Leipzig
18 - Munich
19 - The Hague
20 - Prague
21 - Hanover
22 - Lodz
23 - Vienna
24 - Vilnius
25 - Copenhagen
26 - Dusseldorf
27 - Frankfurt
28 - Budapest
29 - Dortmund
30 - Sofia
31 - Hamburg
32 - Marseille
33 - Palermo
34 - Turin
35 - Dublin
36 - Bremen
37 - Essen
38 - Cologne
39 - Rotterdam
40 - Riga
41 - Barcelona
42 - Genoa
43 - Amsterdam
44 - Rome
45 - Athens
46 - Milan
47 - Stockholm
48 - Naples
49 - Gothernburg
50 - Paris
ENDS
The best places to retire index was created using eight data points, and each city was measured on a weighted score out of 100 for each data set, to create an index score overall out of 800.
Money Minder looked at:
Please be aware these articles are for general information purposes only and correct at time of printing. We will not accept responsibility for any errors made or actions taken by any readers that have acted on the information contained. Answers given are for guidance only and specific advice should be taken before acting on any of the suggestions made. All information is based on our understanding of current tax practices, which are subject to change. Always remember when investing, past performance is not necessarily a guide to future performance and the value of some investment units can fall as well as rise.
