Where to retire if you’re on a budget

Chris Torney / 31 August 2016 ( 04 October 2017 )

Find out how you can retire somewhere beautiful in the UK or even abroad, without breaking the bank.



The result of the EU referendum in June 2016 means that many people are likely to have put their plans to retire to Spain, France or other member states on hold. There is a great deal of uncertainty currently surrounding what effect Brexit will actually have on our ability to live in Europe.

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Once our departure has been formalised, will Brits still be free to buy property on the Continent? Will the UK government continue to offer annual state pension increases to those who have retired to EU countries – and what about the cost of healthcare?

While these questions remain unanswered, it could be worth considering the alternatives if you are keen to retire to sunnier climes or more scenic surroundings. But how can you do so without breaking the bank?

Retiring in the UK

Britain’s most popular retirement hotspots have traditionally been in the south of England thanks to the better climate – not to mention proximity to the Continent.

But as you would expect, this means that property in the most sought-after areas can be prohibitively expensive. Recent research from Halifax bank found that the average house price in the Sandbanks resort near Bournemouth was over £650,000, while in Salcombe, Devon, the going rate is £540,000. The study found that Padstow in Cornwall and Aldeburgh in Suffolk are also particularly pricey.

If you are retired and living as a couple or on your own, you may not need a property as large as a typical family-size home – but nonetheless, buying in towns such as these mean your money will not go as far.

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Some rural areas can be especially expensive as well: Halifax highlighted the likes of Tandridge in Surrey, east Dorset, Mid-Sussex and the Cotswolds as being among the least affordable countryside locations.

So how can you go about finding a retirement location that is appealing in terms of weather and surroundings, but which won’t leave you living beyond your means?

Don’t compete with holidaymakers

Many of the most desirable retirement locations are also popular holiday destinations as well – Salcombe and Padstow, for example. If you want to buy a home in places such as these, you’re competing not just with other retirees but also families looking for second homes or holiday properties – hence the expense.

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You should be able to save money by looking in areas which have the right amenities and even proximity to the coast, but don’t do quite so much tourist business.

…or with commuters

Similarly, try to avoid areas where there are likely to be commuters pushing up house prices as well. Many of the rural areas in the South-east, for example, are popular with young couples or families who want to move out of London while still travelling into the city for work. If you don’t need to be so close to the capital or other major cities, there is little point in paying a house-price premium for doing so.

The same applies to transport links: the better connected you are in terms of motorways and/or the rail network, the more you can expect to pay for property. If you aren’t planning on doing a lot of travelling, you could be better off looking for somewhere off the beaten track.

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Look north (and west)

Some of the UK’s most stunning scenery can be found in the north of England, Scotland and Wales. Yes, the weather might not be as consistently dry and warm as in the south of England or East Anglia, but this is a trade-off worth considering.

The Halifax research mentioned above found that nine of the UK’s 10 most affordable seaside towns are in Scotland – these include places such as Stranraer, Millport and Thurso. The Yorkshire coast – featuring towns such as Bridlington, Scarborough and Whitby – also has considerable appeal, as does Pembrokeshire, among many beautiful parts of Wales.

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Retiring overseas

Moving abroad when you reach pensionable age has a significant appeal. But given the uncertainty surrounding Brexit, many people will be looking at their options elsewhere.

Property prices in many parts of the world, such as Canada, Australia or South Africa as well as the Far East, can be considerably lower than in the UK. Recent falls in the value of sterling are, however, likely to have changed the situation to some extent.

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But there are two main other issues to be taken into account when thinking about retiring abroad. The first concerns the state pension: the UK government has agreements with some countries that British pensioners should continue to get the same annual increases as those who remain in this country – but this is not the case everywhere.

In Canada, Australia and South Africa, for example, expat state pensions are effectively frozen at the point the recipient emigrates. There has been pressure on the government to allow all pensioners to benefit from the annual uprating for many years, but no change in the rules appears to be imminent.

Retire to the US and you could face huge bills for medical treatment... private health insurance would be vital.

The other issue is the cost of healthcare: if you were to retire to the US, for example, you could face huge bills for medical treatment and private health insurance would be absolutely vital (although expensive, especially for older people).

Australia and Canada, on the other hand, have healthcare systems more similar to that in the UK, so the potential costs here are much lower.

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At present, reciprocal healthcare agreements with other EU member states mean that Brits can generally be treated for free or at low cost in Europe. But it remains to be seen how the Brexit negotiations will affect the current system.

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The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.