‘I retired to Portugal – it’s like living in a five-star hotel’ | Latest Lifestyle News
Ken MacKenzie has always loved spending time at his holiday home in Praia d’El Rey, in Portugal. So after retiring in 2021, he set about trying to convince his wife Diane to move there permanently.
The couple had bought a plot of land north of Lisbon in 2007. There were setbacks in getting their project off the ground due to the financial crisis, but by 2011 they had a five-bedroom villa – with a pool and sea views.
During school holidays the couple, along with their four children, would visit for weeks at a time. MacKenzie would often commute back on Monday mornings to London, where he worked as a partner at an accountancy firm, and then rejoin the family on a Thursday evening.
“It was always in my mind that we could live here in the future, but you do have to recognise that things are going to be different,” says MacKenzie, 64. “You give up your routine and your day-to-day contact with friends and family.”
Finally, in March 2024, the family made the decision to make the holiday villa their full-time home.
Praia d’El Rey became a holiday bolthole for the MacKenzies and their four children, but Ken says, ‘I always had it in my mind to live here’ – Mauritius Images GmbH / Alamy
How to move to Portugal
Portugal has long been a popular destination for British expats. Not only is the weather better and the cost of living lower, but it has been relatively easy to get a residence permit and – until recently – there were significant tax breaks for expats. It is estimated that almost 50,000 British expats live in the country.
Those moving to Portugal will first need to apply for a residency visa, and then once they are in the country, apply for a residency permit. This is usually valid for two years and can be extended for a further three years, according to Gilda Pereira, of the Portuguese migration agency Ei.
After living in the country for five years on this permit, you can apply for a permanent residency permit or citizenship. For all of these, you will need to prove you have sufficient income to live on and accommodation.
Since Brexit, a golden visa programme has opened up to UK residents moving to Portugal. This is a visa available to those investing or buying a property in the country, but does not require you to live there permanently.
But Pereira says the most common option for UK retirees is a D7 visa, which is available to non-EU nationals who can prove they have the funds to support themselves – with €870 (£753) a month for a single person or €1,305 (£1,130) a month for couples. This does not require an investment.
Previously, some expats were eligible for the Non-Habitual Residents (NHR) tax scheme, which offered generous tax breaks to foreign residents – including a reduced tax rate of 10pc on UK pension income. This ended in 2024, although those who had already qualified are able to benefit for 10 years.
The MacKenzies moved before the scheme ended, so are able to enjoy this tax break. “It is attractive that there is a tax benefit, but we would have moved here anyway,” says MacKenzie.
The NHR has been replaced by a new scheme, the IFICI, which does not offer any tax breaks on pension income, says Pereira. However, there is no inheritance tax charged in Portugal. The tax was abolished in 2004, and instead residents pay a flat rate of 10pc stamp duty on inherited assets – although close relatives including a spouse, child or parent who inherit are exempt from this.
A double-taxation agreement between the UK and Portugal means you will not pay tax twice on the same income. However, those planning to draw on their pension should consider taking their tax-free lump sum before they become Portuguese tax residents, because there is no equivalent tax break in the country.
Everyone registered as living in Portugal is entitled to use its national health service. Unlike the NHS, this is not free but the fees are relatively low – at €5 for a GP appointment and €15 to go to A&E.
Pereira says: “Many people choose Portugal for the weather, the friendly people and the healthy lifestyle. However, they can find the bureaucracy a problem. Applying for visas and permits can be difficult so it is worth finding a professional who can help with the process.”
MacKenzie adds: “Moving country is like moving house but more extreme. And then, if you are dealing with retiring at the same time, it means you have to flip your mindset from saving to spending. It can be a massive challenge.”
Portugal is a favourite with British expats. To move there you first need a residency visa, then when in the country, a residency permit – Eve Livesey
‘I love to sit on the terrace and watch the waves’
For MacKenzie, retirement in Portugal is everything he had hoped for. He swims every day and uses his sauna. He plays golf, goes walking with his dog Gizmo, enjoys cycling and going to the gym. The nearest beach is just 250 metres away.
“The weather is so much better than the UK and it’s a very outdoors lifestyle. I love to sit on the terrace and watch the waves, it’s such a spectacular setting. It feels like living in a five-star hotel,” he says.
“Having the holiday home has made it all easier. I think it would be daunting to move if we hadn’t spent time here before.”
The MacKenzies’ villa is just north of Lisbon: ‘The weather is so much better than the UK, it’s a very outdoors lifestyle,’ says Ken – Alexandr Spatari
Portugal is one of the more affordable European countries to live. According to consultancy Immigrant Invest, you can expect to spend about €300 a month on groceries, while a monthly travel pass is €40 and a litre of petrol €1.87. It estimates that a single person needs about €1,780 a month to live comfortably, including rent.
Property prices vary significantly across the country, from about €1,500 per square metre in the Alentejo region in the centre and south of the country to €3,644 per square metre in central Lisbon. According to Portugal’s national statistics office, house prices across the country increased by a massive 16.3pc in the year to the first quarter of 2025.
1308 Property prices in Portugal are on the rise
MacKenzie and his wife downsized their house in the UK to a smaller property in Tunbridge Wells before moving, and now rent it out to get a steady income stream. He also receives an income from investments and draws down on his private pension.
The couple will get the full state pension in a few years, and Portugal is one of the countries where retired expats can still benefit from annual increases in the payment – thanks to the UK’s valuable triple lock. However, it depends which country you retire in as to whether you will enjoy this protection.
For anyone considering a move overseas, MacKenzie recommends attending events to learn more about how to do it. “The Portuguese Chamber of Commerce does a six-monthly roadshow in the UK, which is very useful. Social media can also be helpful but there is a lot of wrong information out there,” he says.
Seeking professional advice can also be worth it for some of the more complex aspects, and the couple have continued using the property agent who looked after their villa when they were in the UK, to help with any issues.
Portugal is one of the more affordable European countries to live – a single person needs about €1,780 a month to live comfortably, including rent – Nick Brundle
“Portuguese isn’t an easy language, and we don’t read it or speak it fluently, so having that help was beneficial. It can also be a problem if you don’t get the sequence of doing things right, for example, getting into the tax system in Portugal while extracting yourself from the UK can be tricky because the tax year runs differently,” adds MacKenzie.
The tax year in Portugal runs with the calendar year from Jan 1 to Dec 31, unlike in the UK where it runs from April 6 to April 5, so you may have a year where you must file a tax return in both countries.
“You need to be realistic about what you want to take on yourself and where you need help.”
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