The 2016 Brexit ‘Vote Leave’ campaign was divisive but ultimately successful, with 51.89% in support during the referendum—many who voted based on concerns about border control and immigration.
One of the many ramifications was the loss of freedom of movement, which previously enabled British and EU nationals to travel across borders without a visa and choose to relocate, pursue a career, or enrol in a university in another EU member state.
Many had anticipated that Brexit would result in sharp drops in the number of British expats moving to the EU, but the latest data shows the opposite—a consistent and ongoing rise, with over half a million UK nationals leaving in 2023.
Chase Buchanan Wealth Management, a global team of international financial advisers operating throughout Europe and North America with support from a UK Administration Centre, shares some of the facts and data and reflects on why the outcome of Brexit seems to contrast with that originally expected.
Understanding migration and immigration in a post-Brexit world
We often speak with clients looking to establish a home or business in another country or who are interested in the most tax-efficient way to restructure their wealth and assets before relocating to a new place of residence. Visas and living costs are always crucial considerations.
While it is true that the 90-day rule means UK investors, business people and families require a visa to fulfil those plans, it’s also correct to say that Brexit doesn’t appear to have made any sizeable impact on the proportions of expatriates who pick a European destination.
In fact, Europe remains the top location of choice, with 39.6% of all those relocating in 2023 heading to Spain, France, Italy, Germany, or Ireland—with Spain as the most preferred destination, attracting 14.1% of UK movers.
British nationals moving overseas continue to pick Europe over any alternative, and although visa rules may now make that a little more complex, the reality is that living somewhere within a short flight of the UK, with lower living costs, beneficial taxation, and affordable property prices, is often considered well worth the compromise of a visa application process.
Likewise, movements of people between the EU and the UK in both directions have grown. However, EU immigration—where people from Europe relocate to Britain—has fallen and even entered a negative position, with more European citizens choosing to leave than those deciding to arrive.
This has had a negative impact, where work migration has long been critical to staffing, particularly in healthcare and hospitality. UK universities have also seen declines in applications from European students, because the complexity of obtaining a study visa and the rising cost of living are seen as deterrents.
Factors behind the steady flow of British expatriates relocating to Europe
As we’ve seen, the end of free movement has not deterred UK nationals from seeking a new life abroad. Part of the reason may be that several countries that rely on foreign skills and investment have introduced new visa categories for those who will bring value to their economies.
Digital nomad visas and long-stay visas are two good examples. The former attracts high-level professionals and those with recognised skills or accreditations, usually enabling applicants to relocate with a spouse or partner and children and potentially claim permanent residency or even citizenship in a few short years.
Countries like Malta and Spain offer professionals generous tax exemptions or allowances, as well as reduced or flat-rate income taxes on remote work incomes, which can mean that living in a warmer climate with a lower tax obligation and better living standards is an easy decision.
Long-stay visas are equally on the rise. They invite affluent, high-net-worth individuals, often retirees, to relocate with a residence permit if they have sufficient funds or passive income streams to support their lifestyle without reliance on state benefits.
Coupled with record-high taxation burdens as a percentage of GDP, concerns around ever-increasing costs of living, and pessimism about living standards, employment opportunities, and the future prospects of the UK economy, incentives designed to appeal to desirable applicants have only added to the numbers of expatriates relocating elsewhere.
Unpicking the underlying reasons behind high post-Brexit expatriate relocations
Of course, for many expatriates, living overseas is a long-held aspiration that may be less related to taxation and economics in the UK and more around their wish to buy a home, establish a business, or work in a profession in a competitive and fast-growing economy.
One of the more recent trends is for younger adults to consider applying for a visa – whereas, in the past, a large proportion of expatriates were retirees spending their golden years in a warm, balmy climate close to one of Europe’s coastlines.
These demographics are often dissatisfied with their inability to afford to purchase a home, even on a reasonably high professional salary, the lack of career opportunities, and, in some cases, concerns about the changing political landscape.
Comparing living costs and standards between the UK and Europe
Reviewing the contrasts between living costs in some of the countries we mentioned earlier, and comparing these to the current UK averages makes it easier to illustrate the decision-making factors.
Spain, for instance, has average living costs 26.4% lower than Britain, with the price of buying a home between 36.8% and 49.9% cheaper, depending on the area. The picture is similar in France, with living costs just slightly lower by 1.2%, but with rental prices that are 33.7% more affordable, and property purchase costs 14% lower outside of major city centres.
Studies also show that the average cost of living in a European country is 50% lower than life in the UK, which can easily cover the average cost of a visa.
With greater access to varied visa programmes, incentive schemes, and lower-cost international travel, we have seen a steady and sustained increase in demand for professional wealth management and financial planning services, arising from the tens of thousands of expatriates who choose to start a new life overseas.
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