Cost of Living Comparison: UK and Portugal

If you’re daydreaming about laid back European life, endless sunshine and afternoons spent sipping coffee and eating one too many pastel de nata, it sounds like an overseas move to Portugal is on the cards. To help you make the most informed decision on your move abroad, you’ll want to have a strong understanding of the cost of living in Portugal.

In our practical guide, we’ll answer the following questions and more:

• What is the cost of living in Portugal compared to the UK?
• What is the cost of living in different Portuguese cities, such as Lisbon, Porto and Madeira? How do these figures compare against those of Spain and other countries worldwide?
• Is there a cost of living crisis in Portugal and how will this affect my day-to-day life as an expat?

Once you’ve finished reading, you’ll have a clear idea of costs and whether Portugal’s expat costs of living are worth you making the decision to relocate.

Why Might People Choose to Move to Portugal?

Portugal is a popular country to live among its expats and residents. In the InterNations Expat Insider 2021 survey, Portugal ranked first worldwide for expats feeling at home. Portugal also ranked in sixth position in the 2022 Global Peace Index, which monitors the safest countries in the world, following closely behind Iceland, New Zealand, Ireland, Denmark, and Austria.

In the OECD Better Life Indicators study, Portugal’s capital city Lisbon scored higher than average for water and air quality, as well as ranking 37th out of 231 cities in Mercer's 2019 Quality of Living City Ranking and beating Paris, Milan, London and Barcelona (Expatica.com).

Factors Affecting the Choice to Move to Portugal

Obtaining a visa as a non-EU citizen

Following Brexit, you’ll need to secure a visa in order to move abroad to Portugal. One way you can do this is through the Portuguese Golden Visa programme, also known as the residence permit for investment activity (ARI). It allows non-EU citizens to live, work, and study in the city for a minimum of seven days per year, with the opportunity to become a permanent resident or citizen of Portugal in five to six years’ time.

Once you become a Portuguese citizen, you’ll get visa-free access to 188 countries. As part of the Portugal Golden Visa eligibility criteria, you have to make a qualifying investment to obtain the right to live, work and study in the country. You can quality for residency by investing £246,753.16, which is one of the lowest investment thresholds in Europe.

Paying for accommodation

If your plan is to relocate to Portugal long-term, you’ll need to find suitable accommodation – one of the first costs to tick off your list when moving to another country. You can expect to pay a deposit, mortgage or rental payments, and estate agent and solicitor fees. Before committing to a mortgage and buying a property abroad, ensure you do your research on the local amenities, travel links, schools if necessary, and crime rates.

Where you choose to move depends on your personal interests. Lisbon is a melting pot of cultures, with over 87 nationalities and a diverse range of restaurants and bars. If you have your heart set on your own place in the sun, you'll soon settle into the popular beach region of the Algarve. Other expats choose to live in the north of Lisbon, home to quaint fishing villages and coastal cities galore.

Securing health insurance

Non-EU nationals who can afford it are advised to take out private health insurance before arriving in Portugal to cover any necessary medical treatments. You’ll normally have to pay for private services upfront and claim a reimbursement from your insurer. While the cost is higher than the public healthcare system, the benefits of going private include shorter waiting times, better facilities, wider choice, and fewer language barriers.

The Cost of Living in Portugal Compared to the UK

Firstly, is there a cost of living crisis in Portugal?

Yes, like most countries in the G7, Portugal is experiencing a cost of living crisis. This has caused knock-on disruption to supply chains, all during a time of uneven economic recovery from the global pandemic.

Provisional data from the National Statistics Institute (INE) found that inflation in Portugal reached 9.0% in August 2022, which is reflected in the country’s skyrocketing costs of food and drink, fuel, rent, electricity and gas bills. The Bank of Portugal has warned that inflation will continue to spread to goods and services that have previously had more stable prices, such as education and health services, rent and restaurants and cafes.

It’s worth expats looking to move to Portugal to learn about the country’s foreign exchange transfer fees, as most Portuguese banks charge between £17.54 and £26.30 per transaction. On top of this, you’ll then pay a fee from the receiving bank in the UK too.

Monthly living costs vs salary expectations

Using data from Numbeo.com, we’ve marked up Portuguese living costs against average monthly salaries, and then compared these to the most popular cities in the UK and further afield.

Here’s a snapshot of our learnings about the average cost of living in Portugal:

• The cost of living in Portugal averages at 26.62% lower than the United Kingdom.
• Estimated monthly cost of living for a single person in Portugal – £496.81 without rent, compared to £692.36 in the UK.
• Estimated monthly cost of living in Portugal for a family of four – £1,748.01 without rent, compared to £2,388.79 in the UK.
• Food in Portugal is 22% cheaper than in the UK, housing is 43% cheaper and transportation is 59% cheaper (Expatisan).

The cost of living in the United Kingdom is more expensive than in 79% of countries in Western Europe, and 84% of countries in the world (Expatisan).

Here’s how the monthly cost of living in Portugal measures up against a few other cities globally:

• Lisbon versus London – Consumer prices, including rent, in Lisbon are 39.20% lower than in London. Restaurant prices in Lisbon are 35.45% lower than in London, while groceries are 25.16% lower in Lisbon.
• Lisbon versus Barcelona – Consumer prices in Lisbon are 12.55% lower than in Barcelona, without rent. In Lisbon, rental prices are 10.65% higher than in Barcelona. Groceries are 10.57% lower in Lisbon, while restaurant prices are 16.07% lower in Lisbon than Barcelona.
• Lisbon versus Ottawa – Consumer prices, including rent, in Lisbon are 17.36% lower than in Ottawa, Canada.

Rental prices

While Portuguese rental costs are lower than in UK cities such as London, they’re still recognised as being high in comparison to average wages.

• The cost of rent for a one-bedroom city centre apartment in Portugal is £633.32. In the UK this is £894.47.
• The cost of rent for a one-bedroom apartment outside of a city centre in Portugal is £504.76. In the UK this is £678.56.
• The cost of rent for a three-bedroom city centre apartment in Portugal is £1,137.67. In the UK it’s £1,600.69.
• The cost of rent for a three-bedroom apartment outside of a city centre in Portugal is £814.48. In the UK it's £1,198.26.

Additional monthly costs

From utilities to internet, public transportation and leisure, these are the additional costs you can expect to pay in Portugal every month after your rent.

Key Takeaways

Need a quick summary of the cost of living in Portugal? Here are the facts to remember:

• Portugal offers more than just sunny climes, delicious cuisine and culture at every corner. It’s recognised as welcoming to expats and is one of the safest places to live in the world.
• Portugal has a cost of living crisis and in August 2022, inflation rose to 9%. This resulted in the cost of household groceries and fuel rising, as well as costs in different sectors including education, health services, rent, restaurants and cafes.
• Non-EU nationals can apply for the Portugal Golden Visa, which allows expats to live, work, and study in Portugal, with the opportunity to become a permanent resident or citizen in five to six years' time. Once you become a Portuguese citizen, you’ll get visa-free access to 188 countries.
• The cost of living in Portugal is on average 26.62% lower than the United Kingdom (Numbeo.com). Food is 24% cheaper in Portugal, housing is 46% cheaper and transportation is 59% cheaper than in the UK (Expatisan).
• In general, consumer prices without rent are lower in Lisbon than in cities including Barcelona, Paris, New York and Ottawa. However, rental prices in Lisbon are 10.65% higher than in Barcelona (Numbeo.com).

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