Portugal - Cost of Living

Portugal - Costs of Living

Cost of Living Crisis: How Does Portugal Compare?

The cost of living in the UK has risen fast. Inflation reached a 40-year high of 9.1% and is currently 3.9% - higher than the Eurozone average of 2.4%. War in Europe has caused petrol prices to reach record highs and food prices to increase for everyone, but UK food inflation remains stubbornly high, at 9.2% at the time of writing.

But how do other costs still measure up? The UK has not been alone in being hit by rising global energy prices, leading to higher bills for businesses and households, but Britain is more exposed to price spikes, particularly when it comes to gas.

In the sixth piece of a series looking at the most popular countries, we take a look at how much it costs to live in Portugal.

Cost of Living in Portugal

Portugal has long been sought after for its low cost of living compared to the UK, although certain parts, including Lisbon, have increased considerably in recent years. According to Numbeo.comthe cost of living is 27% lower than in the UK in January 2024, with average rents 25% lower than in the UK.

Portugal’s average salary is around €21,000, which is far lower than the OECD average, and below the average wage in Spain, Italy, and France. Taxation is typically modest in Portugal, along with transport costs.

How much do you need to live in Portugal? Numbeo.com suggests that a single person needs €650 a month without rent/mortgage.

Moving to Portugal - 'Cheap as Chips'

John Clarke, a former property developer in the UK, believes his five-bedroom villa near Albufeira on the Algarve is as ‘cheap as chips’ to run, having recently sold a property he kept as an investment in the UK.  After living in Henley-on-Thames in Berkshire he moved to the Algarve four years ago after first living in central Portugal.

House Hunters Portugal

“I came for the sun, the people, the slow pace of life, the food…” says John, 64, who lives with his partner Julia who is Portuguese/Brazilian. “I discovered it whilst touring Europe on a motorbike I bought when I hit 40 and decided I wanted to live here.”

He spends his time renovating the house, which he has transformed since he bought it, working on the garden – there are carob and olives trees – and doing odd jobs for people.

House in Portugal

The five-bedroom property sits on a 33,000 sq m piece of land and has a heated pool and jacuzzi. The fact that solar panels heat the pool and part-fuel the rest of the house saves him money. “I pay around €100 a month for electricity, and don’t pay for water as a I have a bore hole.”

His council tax is €230 a year – a fraction of the €1,700 he was paying on his UK home. His broadband is around €50 a month; his mobile phone bill €11.99.

In keeping with our reports from other countries, he says the cost of supermarket food is similar to the UK, having risen due to the Ukraine war. “The same goes for petrol – it’s around €1.90 a litre for diesel here; when I was back in the UK recently it was £1.90,” he adds.

But some good news for beer drinkers. In Portugal a large beer - uma caneca – is around €1.50 to €2.  “A very large G&T – they make them much larger here – is around €3.50 to €4,” he adds. “We grow our own fruit and veg which also helps. Having so much sun is just a big plus all round,” he says.

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Find out more about moving to PORTUGAL

Liz Rowlinson