Thousands of expats are struggling with their finances as living costs in the eurozone are shooting up at more than four times the rate of inflation in the UK.
Life is grim in some countries as house values have collapsed by up to 40% while soaring exchange rates and cost of living costs eat in to fixed incomes.
The latest Post Office Expat Payments Index found that the cost of living abroad has risen by an average 11% worldwide since 2011 – rising closer to 15% for those in the eurozone.
Expats and Brits with overseas holiday homes face living costs of almost four times the 3% UK inflation rate (April 2012).
Only 3.5% of over 900 people asked by the Post Office had seen no increase in costs over the past year, but almost half (48.4%) said they had paid out more than 10% extra on household expenditure, motoring and meals out. A fifth (18%) said they felt that these prices had risen by over 20%.
The surge in prices was even more marked in the most popular European countries for expats, says the Post Office report.
Spain, Cyprus and Portugal were particularly hard hit with food and fuel prices named as the key issues:
- Spain: A fifth of expats said the cost of eating out had risen over 15%, while 71% reported an increase of over 10% year-on-year for fuel.
- Cyprus: All Cyprus expats asked said that prices had increased, with 30% saying prices had risen by over 20%, and a quarter reporting a rise in the cost of food of more than 20%.
- Portugal: A fifth reported year-on-year rises in living costs of over 20%, while 85% said food and household bills were up by over 10%.
While living costs were rising, three quarters of expats worldwide (72%) reported that the value of their property had either remained static or fallen in the past 12 months – one-in-ten by over 20%.
With confidence at a low ebb, more than two-thirds (67.5%) said that the price rises had already impacted on their lifestyle and would mean making significant cutbacks this year.