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Where to retire if you’re on a budget

Chris Torney / 31 August 2016 ( 08 April 2021 )

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

A retired woman celebrates about retiring off the beaten track

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. Figures from Zoopla  show that the average flat price in the Sandbanks resort near Bournemouth is over £1m with detached properties selling for over £1.8m, while in Salcombe, Devon, the going rate for a terraced house is £668,000 or over £1m for a detached house. Research has found that Padstow in Cornwall and Aldeburgh in Suffolk are also particularly pricey places to live – average property prices are over £590,000 and £585,000 respectively.

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 means your money will not go as far.

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Some rural areas can be especially expensive as well: the likes of Tandridge in Surrey, as well as 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.

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.

Many of the UK’s 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.

Middlesbrough, Bradford, Sunderland, Grimsby and Shildon are some of the cheapest places to buy a house in the UK, with average house prices in the region of £55,000 to £75,000.

Retiring overseas

Moving abroad when you reach pensionable age has a significant appeal. But given how much harder retiring to the EU has become following 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. Changes in the value of sterling are, however, likely to have changed the situation to some extent.

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.

Retiring to Canada

What’s the appeal?

Canada is a huge country and there is a great variety of places to live. It’s not too far from the UK – a flight from London to Toronto takes less than eight hours – and living there makes it easy to visit the United States.

English is spoken throughout the country (although French is the main language in Quebec), and the quality of life is generally high.

Bear in mind, though, that winters in many parts of the country can be much harsher than we are used to here in Britain.

The cost of living

The cost of property and day-to-day living is reasonable by UK standards, with a single person estimated to cost around $2,730 a month.

House prices in cities such as Toronto and Vancouver are, as you’d expect, considerably higher than in quieter or more rural areas.


A big advantage of living in Canada when compared with the US, for example, is the fact that it offers long-term residents free or low-cost healthcare.

You may need to take out your own medical insurance to cover all eventualities but this is likely to be much cheaper than in the States.

The right to retire

If you plan on living in Canada permanently, you will need to apply formally for residence.

Priority is given to immigrant workers, but if you have a high level of savings and are well educated, this should help with your application even if you have already retired. If possible, it could be worth making an application for residence while you are still in employment.

Finally, if you have a family member who is already resident in Canada, they may be able to sponsor you and thereby speed up the process.

Your UK state pension

One of the biggest downsides of retiring to Canada is the fact that your UK state pension will not be eligible to annual uprating: instead, it will be permanently fixed at whatever level it is when you emigrate. Because it will be paid in Canadian dollars the amount you receive will fluctuate depending on the exchange rate. 

Retiring to Australia

What’s the appeal?

English is spoken, the weather is great and the quality of life is very high – it’s no wonder that Australia is one of the most popular retirement destinations for Brits.

One issue, however, is the distance: if you want to return to the UK to visit relatives (or have them come to see you), it will involve a very long flight.

The cost of living

As in Canada, living costs have long compared favourably with those in the UK – estimated to be about $2,835 for a single person.


The Australian healthcare system is a mixture of private and state-funded provision, and you are likely to need a fair degree of personal health insurance to cover your potential needs.

However, the cost of cover tends to be lower than in the US, say.

The right to retire

If you plan on living permanently in Australia, you will generally need to formally migrate there.

Visas are available to wealthier individuals who plan to invest in the country, and it will be easier to be granted residency in Australia if you already have relatives who are citizens.

Your UK state pension

As in Canada, the UK does not have an agreement with Australia to uprate Brits’ state pensions every year. This means your UK pension will not be inflation linked, and could decline sharply in value in real terms if prices rise significantly.

Retiring to New Zealand

What’s the appeal?

Beautiful scenery, a cooler (but still pleasant) climate than Australia, and a great standard of living – for older people in particular, according to numerous surveys. Even more distant than Oz, though.

The cost of living

The costs of living in New Zealand are high compared to neighbouring Australia because a lot of food and goods are imported into the country. Excluding rent it is estimated to cost around 1,400 NZD for a single person. Big cities such as Auckland and Wellington will naturally have higher property costs than elsewhere.


New Zealand also has a mixture of private and state-funded healthcare, but private medical insurance is necessary. If you’re applying for residency, you will need to demonstrate that you are in good health.

The right to retire

Like Australia, visas are available for high-net-worth retirees as well as those people with family already in the country. Otherwise, you might struggle to move there permanently.

Your UK state pension

New Zealand is another country in which Brits are denied their annual state pension increases.

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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.