For many British pensioners considering a retirement in the sun, perennial holiday favourites such as France, Portugal, Spain, or possibly Australia usually spring to mind.
But while holiday hotspots might make for a great place to visit, they might not offer what you need for a stress-free retirement.
In addition to lifestyle and hours of sunshine, pensioners will also need to think more practically about access to healthcare, safety, the cost of living and tax.
Alan Turner, of wealth manager Hoxton Wealth, said: “We’re seeing a clear shift away from the traditional retirement destinations that have historically attracted British retirees. Places like Spain and Portugal are still popular, but the decision-making process has become far more complex.
“Clients are now looking beyond lifestyle and focusing much more on tax efficiency, residency pathways and long-term financial structure.”
Those who are planning to retire overseas, he added, are increasingly challenging what constitutes a “good” retirement destination.
“A lower cost of living on its own is no longer enough. People are asking more detailed questions around tax exposure, healthcare access, and how easy it is to maintain ties with the UK or the US. That’s why some of the less obvious locations are now coming into the conversation much earlier in the planning process.”
Using research conducted by the University of Warwick alongside Hoxton Wealth (UK Retirement Attractiveness Report 2026), Telegraph Money highlights five alternative destinations that meet the criteria, plus three that don’t.
What’s behind the research?
Researchers at the University of Warwick examined 20 overseas destinations against 10 key criteria:
- Visa access and residency options
- Cost of living
- Taxation and estate planning
- Healthcare quality and access
- Economic and political stability
- Climate and lifestyle
- Safety
- Language and interaction
- Property ownership rules
- Travel connectivity
Each country was given a score out of 10 in each area, giving a maximum total score of 100.
For benchmark purposes, the UK is rated 70.
Our pick of the top destinations
1. Cyprus
Score: 86/100
Cyprus, an island country in the eastern Mediterranean Sea, came joint top in the research, with a score of 86.
With established expat communities in Paphos and Limassol, Cyprus scored top marks for weather and lifestyle, thanks to its Mediterranean location and often relaxed way of life. It also scored nine out of 10 for safety and language integration, with English commonly spoken.
Living expenses are reasonable, too.
Joelle Maurice, of the University of Warwick, said: “Generally speaking, the cost of living in Cyprus is lower than in the UK, particularly outside the island’s major metropolitan areas. Pace of life is relaxed, with emphasis on quality time.”
The big draw for wealthy retirees is likely to be Cyprus’s 10/10 score for taxation and estate planning.
Tax on pension income is considerably less than in the UK. Once you become a Cyprus resident, you can either pay a flat rate of 5pc on all your foreign pension income more than €5,000 (£4,331) a year or add your pension to your total income to be taxed using the country’s progressive income tax bands, which range between 0pc and 35pc (on income more than €72,000).
There are also no wealth or inheritance taxes in Cyprus.
By comparison, its larger neighbour, Greece, scored 76 in the research. The tax system there isn’t quite as favourable, and English isn’t as widely spoken.
2. Ireland
Score: 86/100
If you want to leave the UK, but aren’t necessarily in search of better weather, Ireland could be a practical choice. The country came joint top with Cyprus in the research, with a score of 86.
Ms Maurice said: “Ireland’s historic ties and geographical proximity to the UK make it a natural choice for retirees. UK citizens have access to public healthcare on similar terms to Irish residents, with private options available to supplement care.”
For cost of living, Ireland scored 6/10, with smaller towns and rural areas more affordable than the bigger cities. While Dublin can be expensive, alternatives such as Galway – known for its beautiful scenery and active expat community – as well as Cork and Limerick, could be better options.
Unlike other destinations, relocating to Ireland should be straightforward. Under the Common Travel Area (CTA), post-Brexit, UK citizens can work, live, and retire in Ireland without a visa.
The tax position is also relatively favourable, scoring eight out of 10. There’s no wealth tax, but the Capital Acquisitions Tax (CAT) will apply to some lifetime gifts and inheritances, charged at 33pc. The threshold for CAT varies between €20,000 and €400,000, depending on the relationship between the beneficiary and the person giving the gift or inheritance, with the highest thresholds applying to gifts from parents and the lowest to gifts to unmarried partners and people who aren’t related to you.
However, UK inheritance tax may be applicable, depending on your domicile.
UK pension income will be taxed at Irish rates of income tax – the standard rate is 20pc, and the higher rate is 40pc. However, unlike the UK, the point at which the higher rate kicks in varies between €44,000 a year and €88,000, depending on whether you’re married or have children.
By comparison, the UK only scored 70 overall, scoring just five out of 10 for cost of living and tax and estate planning.
3. Malta
Score: 85/100
If you’re looking to retire to the Mediterranean, Malta could be a good choice. With a score of 85, it comes in a very close third overall, comfortably before more obvious choices such as Spain, Italy, France and Greece.
English is an official language of Malta, so integration for expats should be easy and has achieved a top score of 10/10. And, although property prices have risen in recent years, life in Malta is still cheaper than in the UK, with more affordable options in Gozo and southern Malta.
However, the University of Warwick researchers said that tax is likely to be a less obvious perk.
Ms Maurice said: “Malta operates a remittance-based tax system, with the Malta Retirement Programme offering a flat tax rate on foreign pension income, subject to minimum annual tax thresholds.
“The country does not impose wealth tax, inheritance tax or estate tax. Changes to the UK non-dom regime have increased Malta’s relative attractiveness for some individuals, increasing its competitiveness for the ‘grey pound.’”
Malta also offers access to free healthcare. Ms Maurice said: “Malta provides a public healthcare system accessible to residents, and UK pensioners may access public healthcare via the S1 scheme. This permits UK nationals receiving a state pension or qualifying exportable benefit to access state-funded healthcare in Malta, with the UK covering the costs.”
4. Mauritius
Score: 82/100
If you’re happy to consider more distant destinations, Mauritius, off the coast of East Africa, might be worth a look.
The University of Warwick gave it an overall score of 82. It is another option that’s comfortably before European favourites.
Ms Maurice said: “Tourism from the UK to Mauritius is booming, and its Retired Non-Citizen Permit, which is available to individuals aged 50 and above, is opening doors for British retirees to up sticks to the island state with relative ease.
“The permit requires a minimum monthly transfer of funds into a local bank account, with other residence permits linked to property investment or business activity.”
For tax and estate planning, Mauritius scored 9/10. She added: “The island nation operates a relatively simple and low-rate tax system, with no capital gains tax or inheritance tax.”
Income tax is charged as follows: the first 500,000 Mauritian rupees (around £8,000) are tax-free, the next 500,000 Rs are taxed at 10pc, and the remainder at 20pc.
Anyone looking for a slower pace of life is in luck. “Lifestyle is centred around coastal living, outdoor activity, and a slower pace of life, with a distinct island lifestyle compared with mainland destinations,” Ms Maurice said.
English is the official language in Mauritius, aiding integration (although Creole is spoken by the majority of Mauritians and French is widely spoken).
5. Uruguay
Score: 72/100
Uruguay in South America won’t be an obvious retirement destination for UK retirees, but it scored 79, just one point below popular Spain.
Although it’s not the cheapest country in South America, it’s certainly more affordable than the UK, and it scored 7/10 for its cost of living.
The country is politically stable, scoring 9/10 on this front, and access to healthcare was ranked 8/10.
Ms Maurice said: “Uruguay is emerging as one of the most desirable destinations for [British expats] looking for a new life in South America and the Spanish-speaking world more widely.”
When it comes to taxation and estate planning, the country also scored a very high 9/10.
She added: “The country’s territorial tax system means that foreign-sourced income is usually exempt from taxation for new residents, for a defined period. After this period expires, income may become taxable.”
There is also no inheritance tax.
“Economically and politically, the country is regarded as one of the more stable in Latin America, with strong democratic institutions and a predictable political environment. The economy is relatively small but well managed, with steady growth,” said Ms Maurice.
And three places you might not want to retire to…
United States
Score: 67/100
Although the US scored highly (9/10) for lifestyle and climate, it scored just 5/10 for tax. Taxes vary between states, and extensive reporting requirements only add to the complexity. Similarly, while the US offers high-quality healthcare, it’s expensive, and insurance costs are rising, giving it a score of just 3/10.
Australia
Score: 66/100
It’s now much harder to obtain residency Down Under: there’s no dedicated retirement visa, and the previous investment-linked system has closed. You’ll now require a parent or partner visa, or pursue an investment route (it scored 3/10 for visa access and residency pathways).
Australia is also an expensive place to settle. The cost of property, particularly in major cities such as Sydney, Melbourne and Brisbane, is high. As such, it scored just 4/10 for living costs.
Japan
Score: 62/100
Unless you have family ties to Japan or business interests in the country, it won’t be easy to obtain residency. Inheritance tax rates are also high, and the wider tax system is complicated for foreign nationals with assets overseas, giving it a tax and estate planning score of 5/10.