# How is the current financial situation affecting you?



## Waterdog (Oct 24, 2011)

“ What’s it like living in a bankrupt country?. It must be a very sad place!”

Believe it not, this was the first question I was asked by the leader of the largest local political party in our part of the UK & a sentiment that I am increasingly being confronted with.

I explain that although a regular visitor to Portugal, I also spend time in a number of other countries & on balance Portugal is one of the happiest but subsequent questions suggest I am clearly not believed.

Ironically, it is my experience the wealthier the community - the greater the dissatisfaction!

However, it got me thinking & so I pose the question. 

How is the current financial situation (changing exchange rates, property values, increasing levels of taxation & the cost of living etc) affected the ex-pat community in Portugal?


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## notlongnow (May 21, 2009)

For us:

- Rising utility bills have made a noticeable dent. Despite how much they are SUPPOSED to have gone up, in real terms we seem to be paying double the amount we were last year.

- We are having to save for the 3.5% extraordinary tax that we have to pay on our 2011 income. We are "high earners" by Portuguese standards - most of our income arises from the UK, and we already had to save additional money for tax over and above what our liability would have been IN the UK, so the extra 3.5% really stings and will make for some very lean months in the new year.

- Food and fuel costs are creeping up - not to a scary degree, but we are being more careful what we buy where - i.e. learning where products are cheaper, buying petrol in cheaper local garages instead of on the motorway.

All this is against a background where our income has stayed stubbornly fixed for the last 2-3 years, after we had become used to decent year on year payrises and bonues for the best part of a decade. 

Net result: the same amount comes in, but it doesn't stretch nearly so far and we have noticeably less disposable income. 

The exchange rate, as we earn sterling, is actually a small silver lining for us right now. When we moved here in 2009, the rate was 1.08 and we did all our budgeting based on 1 to 1, so 1.19 is actually quite a nice thing to see. 

The other small result is that we have managed to negotiate a rent reduction because there is so much empty property in the Algarve. Nobody is going to want to see the back of a reliable, long term tenant.

The other thing that could be completely unrelated is that we are noticing an increase in poor quality food in butchers and supermarkets. At least once a week we are buying meat like chicken, opening the bag and binning it because it smells decidedly off - to save every euro, people seem to be trying to sell on produce that is past its best. Also, when the local area is SO quiet (it seems to be more-so than the last two years), you have to wonder how it is possible for a restaurant to offer 16 menu choices when it only serves 4 covers in a night, without taking some scary shortcuts with regards food hygiene. Although this last paragraph may seem like something of a tangent, I can't help but think it is all part of the same story.


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## Surfin USA (Nov 11, 2011)

See the same thread has been running for a long time on the Greek site & those guys appear to be having a really bad time. Far worse than anything I witnessed in Spain or The Algarve when I was last out there.

Are we heading down the same road?


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## jojo (Sep 20, 2007)

Surfin USA said:


> See the same thread has been running for a long time on the Greek site & those guys appear to be having a really bad time. Far worse than anything I witnessed in Spain or The Algarve when I was last out there.
> 
> Are we heading down the same road?


http://www.expatforum.com/expats/gr...-how-has-economic-situation-affected-you.html

Jo xx


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## Waterdog (Oct 24, 2011)

Surfin, from your previous posts, understand you are currently in the UK but planning to sail to Spain or Portugal. 

Have you thought of heading any further east?

I have been visiting Cyprus on & off (North & South) for most of my adult life. I will be heading back that way in a few weeks. Probably be there for a month or so, so, if you like, will have a look around & get back to you?


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## Surfin USA (Nov 11, 2011)

Hi Waterdog, Hadn’t thought of going that far east but who knows so would be grateful for any info.

Jo, assume your question directed at me? Prices in both the US & UK are steadily rising but if you are employed they are manageable. In the UK fuel/energy is probably the worst area; in the US it is more general.

Many businesses in The Algrave are seasonal & the workforce transient so you see the normal closures & moving on. The big question, “Will they reopen in the Spring”? 

Increasing numbers the older ex-pat population are stating, given the opportunity, they would like to return home but are trapped by the dramatic drop in the value of their property. 

At present, the biggest problems are the big hike in EVA & rising energy costs.

None of these countries have problems approaching those besetting Greece.


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## wink (Aug 23, 2011)

[QUOTEIncreasing numbers the older ex-pat population are stating, given the opportunity, they would like to return home but are trapped by the dramatic drop in the value of their property. QUOTE]

I do not understand this statement, even if someone is living on a pension, Portugal is still far less expensive than any other EU country, so what is the reason for them wanting to return home?


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## notlongnow (May 21, 2009)

> Portugal is still far less expensive than any other EU country


Really?

Our utilities are a lot higher than the UK.

Our tax liability is significantly more than the UK.

Cars are incredibly expensive.

Food costs for NON imported items are going up rapidly (to the point that when we are in England everything now seems extremely cheap).

Some things are cheaper - housing, wine, tobacco, public transport to name a few, and there are less stealth taxes (i.e. paying to park everywhere) but overall it all evens out I think.

I can be the king of rose-tinted specs, but to say that Portugal is "far less expensive" than anywhere else in the EU doesn't play out in our experience...


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## Surfin USA (Nov 11, 2011)

Pensioners are on a fixed income; therefore, the large change in the exchange rate has hit them hard.
Returning to the UK they would qualify for a number of benefits not available to ex-pats. They also believe, rightly or wrongly, in advancing years they will be better cared for (possibly by their families or social services) back in the UK.


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## Waterdog (Oct 24, 2011)

I too have met up with an increasing number of senior citizens, who given the opportunity, would relocate. I believe that it has always been the case that as folk grow older both their views & situations change.

In the past there has always been this migration back to their place of origin but having bought property at the top of the market, they are now trapped.

Additionally, there is a growing fear that as things go from bad to worse, as the weakest they will be pushed to the wall.


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## anapedrosa (Mar 21, 2011)

I didn't answer at first as I am not in Portugal yet, but as the question appears to be open, I'll jump in.

I'm in a country considered to be in good shape, yet 3 in my family dealing with layoffs and finding new work. We're an oil rich country, yet in the last 2 years our price of gas at the station has increased over 20%. Salary increases are unheard of, as an independent I cut my rate 8 years ago and consider myself lucky that I haven't had to reduce it further since. Still - we are all in good shape, we're managing better than most.

The initial post referred to happiness - we have good shelter, good food, a decent health care system and most importantly each other. But... it's currently -14C outside and there is frost on my windows. Though I can't say my happiness is dependent on moving to Portugal, I sure am looking forward to it.

The post about returning home in old age rings true for me. When my OH and I move to Portugal, my parents have decided to return at the same time. I plan to keep a reserve just in case we decide to return some day - also to allow for continued increasing costs in Portugal once we are there. 

All I can say is - thank goodness they can't tax the sun.


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## Ingles (Feb 2, 2009)

All I can say is - thank goodness they can't tax the sun.[/QUOTE]

Oh! please don't give the ******s idea's


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## robc (Jul 17, 2008)

Ingles said:


> All I can say is - thank goodness they can't tax the sun.


Oh! please don't give the ******s idea's[/QUOTE]

I fear it is too late, we have previously had a window tax in the UK. 

Rob


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## Waterdog (Oct 24, 2011)

The solution to the window tax was to brick up the widows so is the answer to the tolls to brick up the A22?

From what my spies are saying no problem as no body is using it.

Sorry, I am straying off thread!


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