UK expatriates feeling the squeeze

Updated: 
PortugalFinancially squeezed UK citizens living abroad are seeing their living costs rise at almost three times the inflation rate in this country, a report suggests.

Household bills, motoring and eating out costs are up by around 8% on a year ago, a survey of 730 people living overseas by the Post Office's Expats Payments Index found.

Two-fifths of expatriates said their overall living costs had soared by more than 10% in the last 12 months, with food and household bills, particularly electricity, among the biggest concerns.

More than half (52%) of property owners surveyed said the value of their home had fallen, marking an increase on two-fifths (40%) who said this a year ago, as the dream of living abroad turns sour for some.

By contrast, the housing market in this country has been seeing a revival in recent months, leading to prices going back on an upward march amid strengthened demand from buyers.

Expats living in Portugal and Greece have been particularly badly affected by rising prices, the research found. Almost one in five expats living in Portugal said they have seen a rise in the cost of household essentials of over 20%.

Three in 10 UK citizens living in Greece said their living costs have risen by more than 20%.

Seven in 10 (70%) expat property owners living in Spain said the value of their home had fallen in the last 12 months, and almost one fifth (18%) believe the value to have dropped by more than 30%.

In France, just 14% of expats said they were unaffected by rising prices, compared with almost one quarter (24%) who said this one year ago.

The pressure on expats has eased a little compared to last year, when the typical annual inflation rate for expatriates was put at 11%.

In the UK, squeezed households have seen some slight relief recently. Consumer price index (CPI) inflation edged down to 2.8% in July from 2.9% the previous month.

John Willcock, head of Post Office Transactional Services, said: "While house prices are reportedly on the rise in the UK, property values are still falling overseas - particularly in the eurozone.

"Rising prices for basic household essentials are leaving little money for extras like eating out."