The dream of many over 55s approaching retirement is to spend their days on a sun-kissed beach away from the hustle and bustle of modern living.
The trouble is even many reasonably well-off pensioners will not have enough cash to fund their fantasies.
While inflation is slipping to around 1% to 2%, which many central banks regard as a manageable level, nevertheless the cost of living is still rising.
That means that fixed pension money is losing spending power and many retirees are finding that their hoped for cheap lifestyle is slipping away in countries like Spain and France.
Living in Mediterranean Europe no longer offers a cheap option to retirees.
And, according to the latest overseas living price index from the Overseas Guides Company, other Commonwealth destinations favourite with British pensioners, like Canada, New Zealand and Australia, are also seeing rising prices.
Dog food and bananas
The index rates day-to-day living costs around the world.
The good news is if you have a dog, then food for your pet is likely to be cheaper in the UK than most other countries – along with bananas.
But rising utility charges across Europe are pushing up living costs even though a supermarket shop is generally cheaper, when other standard bills like electricity and gas are factored, pensioners are paying more than they would in the UK.
The cheapest country in the European Mediterranean is Turkey.
The index shows pensioners in Turkey are paying less for their energy and food than in many other retirement spots across the world.
The research also notes that public transport is also cheaper in Turkey than most other nations – and for some reason diesel costs less than petrol in just about every country except Britain.
Cheapest places to drink
Owning a car is less expensive in Canada than the US or Britain, but public transport costs more there and in New Zealand.
If you enjoy drinking, Italy has the cheapest wine and beer, although Portugal shares the beer ranking and Cyprus the one for wine. Portugal is also the cheapest place to eat out. The most expensive places to drink are Canada and the USA.
“Living costs vary according to everyone needs, so some expats are paying a lot more or less than others,” said the company’s Angelos Koutsoudes.
“However, many do not take into account how much money they will need and get a nasty shock when their savings and pensions start to run down quicker than they had planned. It’s much more sensible to find out what these costs might be before you move rather than turning up and getting a surprise.”
Expats retiring abroad, especially to emerging countries, need to keep in mind that alot of these countries are experiencing a 10% annual growth rate and huge inflation thats not always captured by the published statistics. As your pension and investments in the UK/US grow at less than 2% year, the annual cost of living could be rising at 10%+ where your living.
You can invest locally to hedge yourself from the rising cost of living, but it also has its risks.