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Rising Cost Of Living Hits Expats In The Pocket

The rising cost of living impacts every expat, wherever they live in the world.

Some places are experiencing higher prices, so this article looks at the top overseas destinations for British expats and offers a run down of how inflation is affecting the money in their pockets.

Australia

Australia is the number one destination for British expats. With 5.5 million Brits living abroad, more than 1.3 million have moved Down Under.

Many live in the largest cities – Sydney, Melbourne, Adelaide, Perth and Brisbane.

Australia ranks 12th in the list of countries with the highest cost of living compiled by expat spending monitor Numbeo.

Their analysis reckons a family of four needs an income excluding the cost of housing of £2,793, while a single person should get by on £775.

Renting a one-bedroom apartment in a city centre costs £1,073 a month. Renting a similar apartment in the suburbs and commuting to work costs £817 a month.

The rent for a three-bedroom apartment in a central district is £1,811, while living in the suburbs is £1,307 a month.

An average after tax salary is £3,396 a month.

Spain

Spain is the top European destination for British expats, with around 800,000 enjoying life on the Mediterranean coast which stretches hundreds of miles from just north of Barcelona to Gibraltar.

The European Union country is one of the cheapest in the bloc and ranks 23rd in the world with Numbeo.

Average wages of £1,425 a month are low, but so is the cost of living with a family of four needing £2,475 a month to pay the bills, including rent for a three-bedroom city centre apartment.

Food is cheap and plentiful, but energy prices are riding high due to the EU imposing sanctions on Russia following the invasion of Ukraine. To ease the problem, the Spanish government has placed a cap on energy prices, limiting prices to no more than 130 euros a megawatt hour, down from an average of 210 euros a megawatt hour in the first three months of the year.

USA

The latest US inflation report says prices have surged by 8.8 per cent in the past year – reaching the highest level since December 1981.

Traditionally, wages are good and prices low in the US, which has attracted 678,000 Brits over the years. The US is ranked the 14th most expensive place for expats to live by Numbeo.

The US is so vast the cost of living can vary between cities. Living in New York is much more expensive than moving to Kansas or Oklahoma. Numbeo data found a family of four renting a three-bedroom city centre apartment needs £5,196 a month to meet the bills.

However, energy prices have seen a 41 per cent hike to a level last seen in April 1980.

Another drawback for expats is a poor British pound to the US dollar exchange rate that hits their spending power in the States.

Canada

Expats in Canada have a similar story to tell as their neighbours in the south. Canada is almost as popular with British expats as the USA.

At the latest count, 603,000 Brits have moved to Canada, which ranks as the country with the seventh highest cost of living.

To get by costs a family of four £2,276 a month or a single person £770 – neither amount includes housing costs, which range between £843 and £1,661 a month.

An average salary after tax is £2,753 a month.

Inflation in Canada is running at 7.2 per cent, but is expected to drop to 3 per cent by the end of 2022 and the target 2 per cent by December 2024. Like most countries, the rising cost of living is mainly due to a 34 per cent hike in energy prices.

Ireland

A surprisingly popular home-from-home which is less than a 100-mile trip from the UK, Ireland is home to 291,000 Brits, making the country the fifth most popular overseas destination for Brits.

As a European Union member, the fate of Ireland’s economy is linked to those of Germany, France and Spain, who are teetering on the edge of recession due to Russian President Vladimir Putin’s threat to switch off oil and gas supplies.

Inflation is raging at 9.6 per cent, according to the latest official figures, and shows no sign of moderating soon.

A family of four needs £2,616 a month to pay the bills, while a single person can get by on £739 a month.

The amounts do not include rent, which ranges from £1,059 to £2,147 a month, depending on the property’s size and location.

New Zealand

New Zealand may be the islands at the end of the world, but they are inextricably linked with the global economy.

The inflation rate has hit 7.3 per cent, which is the highest for 32 years, while the cost of living is the 18th highest in the world and on a par with Australia.

New Zealand is home to 215,000 British expats – the sixth most popular destination for Brits abroad. The central bank blames rising construction and property costs for the hike, followed by energy price increases.

To keep track with prices, families need a monthly income of £2,700, while a single person needs £745. In addition, rent ranges from £690 to £1,431 a month.

The average salary in New Zealand is £2,266 a month after tax.

South Africa

Crime and politics tend to worry expats in South Africa more than prices, which is ranked as the country with the 32nd most expensive cost of living.

Prices are low but inflation iis raging at 6.5 per cent – a 13 year high – with fuel, transport and food prices leading the charge.

South Africa is home to 213,000 British expats – making the country the sixth most popular destination for expats.

A family of four needs to earn £1,527 a month to pay the bills, plus between £312 and 3702 a month for rent. Singles need a monthly income of £439 plus rent.

A typical average monthly salary after tax is £1,074.

How Inflation Impacts Expats FAQ

What is inflation?

Inflation is a general increase in prices over a fixed period expressed as a percentage. The higher the rate of inflation, the more prices are going up.

How does inflation impact spending power?

The higher the inflation rate, the less someone can buy this month with the same amount of money as they spent last month.

Where’s the most expensive place for expats to live?

Switzerland is ranked as the country with the highest cost of living, followed by Norway, Iceland and Denmark.

Where’s the cheapest place for expats to live?

Numbeo rates 105 countries, and Sri Lanka is bottom of the list as the cheapest place for expats to live.

Where does Britain rank on the cost of living charts?

Britain is regarded as the 6th most expensive country to live in.

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