Retirement in Portugal

Portugal is a popular retirement destination for people from all around the world, especially Britons. A warm climate, stunning coastline and plentiful sunny beaches make the country a haven for retirees.

The Algarve and the island of Madeira are among the areas that have experienced an influx of UK retirees and property investment in recent years. Property prices and the cost of living in Portugal are still low enough to attract many retired Brits in particular. The Algarve, for instance, remains cheaper than the Costa del Sol.

Additionally, the Portuguese are a generally warm, kind and hospitable people, welcoming visitors into their country, which is great for people looking to retire there.

Living expenses

Brits retiring will find that their pound (or euro) goes further in Portugal, thanks to the country’s relatively low cost of living, especially when compared with other established countries in Western Europe.

Financing your retirement

There are various key issues that you need to consider when it comes to financing your retirement while living in Portugal. This generally includes checking to see what impact a move will have on the benefits and pensions that you are entitled to receive in the UK.

When retiring to Portugal, it is crucial that you “seek independent advice as far as your private and UK state pensions are concerned”, according to Spectrum’s Jonathan Goodman, who adds: “This would ideally happen before your arrival [in Portugal].”

Before moving to Portugal, it is necessary to inform the Department for Work and Pensions that you are emigrating and provide them with your new contact details as soon as possible.

Currency matters

It is imperative that you take the sterling-euro exchange rate into consideration when moving to Portugal. Always calculate what impact any major fluctuations between sterling and the euro may have on your lifestyle in Portugal.

Your pension

In addition to a private pension, you may be eligible to claim a UK state pension while living in Portugal, subject to the necessary consent. Check with the International Pension Centre (IPC) to see if you are potentially entitled.

Those approaching state pension age should receive a claim form four months before you hit the milestone. Contact the IPC If you are still waiting for a letter three months before you reach state pension age.

Life certificate

To ensure that you are still entitled to receive the state pension, you may be sent a ‘life certificate’ – a form – by the Department for Work and Pensions.

Do not panic if you receive a life certificate. Simply sign it and get it witnessed – the list of people who can do this is the same list of people who can countersign a passport photo – and send it back. However, your payments may be stopped if you do not submit this form, in accordance with the instructions on the form.

Rates of state pension

Your state pension will increase each year, even if you live in Portugal as it is within the European Economic Area (EEA).

Payment of your pension

Your state pension can be paid into a Portuguese bank or UK bank/building society. However, you are not allowed to elect to be paid in Portugal for part of the year and the UK for the rest of the year.

The account should with be in your name. Alternatively, you are allowed to use a joint account, or someone else’s account, subject to that individual’s permission.

You require the international baking codes, IBAN and BIC numbers, in order to receive payments in Portugal.

You can choose whether to be paid every four weeks or quarterly, but note that if you elect to receive the money direct into a Portuguese account, you will be paid in euros, which means that the amount of money you get may fluctuate. See section 7: Currency exchange in Portugal for more details on getting the most out of currency exchange.

Levy on your state pension

Over and above a certain amount of money that you receive as part of your state pension may be taxable. This will depend on your taxable income and whether you are classed as a UK resident or non-UK resident when it comes to tax.

Non-UK residents

While non-UK residents are not required to pay UK tax on their state pension, they may have to pay a levy in Portugal. However, they will not have to pay the tax in both nations due to the double taxation agreement between the UK and Portugal that is in place.

Healthcare in Portugal

The healthcare system in Portugal is similar to the NHS in the UK. The Portuguese Serviço Nacional de Saúde (SNS) is the equivalent of the UK’s National Health Service, providing hospital and local health centre services. You should be treated in the same way a Portuguese citizen would. However, not all visits to doctors or hospitals will be free of charge. This means you may have to make a patient contribution to the cost of your care.

If you are a non-resident, your European Health Insurance Card (EHIC) will enable you to access state-provided healthcare at a reduced cost, or sometimes for free. It will cover you for treatment that is needed to allow you to continue your stay in Portugal until your planned return. It also covers you for treatment of pre-existing medical conditions and for routine maternity care.

Useful health phrases in Portuguese

“I feel ill.” – “Estou doente.”

“Call an ambulance.” – “Chame uma ambulância.”

“Where is the nearest pharmacy?” – “Onde fica a farmácia mais próxima?”

“I would like to see a doctor.” – “Gostaria de ver um medico.”

“I would like to make an appointment.” – “Gostaria de marcar uma consulta.”

Help in emergencies

You also need to be aware of emergency procedures; who to call in an emergency and which hospitals that will be the most suitable for your needs in the event of an emergency. Portugal’s emergency number is the EU-wide emergency number 112 which is free to call, although in some places it is better to phone the hospital direct. If you need general medical advice in Portugal, you can call Saúde 24 (Health Line 24) on 808 24 24 24.

Continue to section 6: Banking in Portugal

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