A comfortable retirement works out cheaper in Panama — around £2,300/month for a couple, versus £2,500 in Spain (about 8% more).
Cost of living, side by side
| Panama | Spain | |
|---|---|---|
| Modest (couple/mo) | £1,600 | £1,800 |
| Comfortable (couple/mo) | £2,300 | £2,500 |
| Premium (couple/mo) | £3,800 | £4,000 |
Indicative monthly estimates for a couple — real costs vary by location, lifestyle and exchange rates.
Panama: Foreigners can own property with essentially the same rights as locals in most areas.
Spain: Foreigners can buy property freely in Spain, with full ownership.
Panama: The Pensionado (pensioner) visa is famous for its discounts and low income requirement.
Spain: The non-lucrative visa is the usual route for retirees with sufficient income and health cover.
Panama: Private healthcare is good and affordable, centred on Panama City's modern hospitals (one affiliated with Johns Hopkins) with English-speaking doctors; private insurance runs roughly US$50-150 a month at younger ages, rising with age. Care is more limited in rural and highland areas.
Spain: Spain has excellent healthcare; legal residents can access the public system (retirees often via a UK S1 form or a paid convenio especial after a year), while the Non-Lucrative Visa requires private cover in the meantime, typically £100-150 a month at older ages.
Panama: Panama uses a territorial tax system, so foreign pensions, Social Security and other overseas income are not taxed at all, and only Panama-source income is. This makes it one of the simplest places for a retiree living on a foreign pension.
Spain: Spanish tax residents (183+ days) pay progressive income tax on worldwide income, combining state and regional bands from about 19% up to roughly 47%, so a UK private pension is taxable in Spain under the treaty (UK government and Crown pensions stay taxed in the UK); rates vary by region, so take advice.
Panama: Tropical and warm all year, with a dry season (December-April) that is the most pleasant and a green rainy season (May-November). The Boquete highlands stay noticeably cooler and fresher. Panama is among Central America's safer countries and uses the US dollar; they drive on the right, English is widely spoken in the capital and expat areas, and daily life is straightforward for British retirees.
Spain: Warm Mediterranean climate on the coasts with hot summers and mild winters, and the Canaries mild year-round; spring and autumn are ideal. Very safe and well set up for retirees; English is widely spoken along the costas, driving is on the right, and daily life is straightforward.
Panama: The buyer's one-off costs are low, typically about 2.5-4.5% covering their own lawyer (around 0.5-2%), notary and registry fees; the 2% transfer tax is normally the seller's. Titled property completes in a few weeks to a couple of months.
Spain: Budget around 10-14% in one-off costs, resale transfer tax (ITP) of roughly 6-10% depending on region, or 10% VAT plus 1.5% stamp duty on new builds, plus notary, registry and legal fees; note the Golden Visa closed in April 2025.
Panama: Boquete for cool, green highlands popular with retirees; Coronado for a beach town within reach of the capital; Panama City for cosmopolitan amenities and healthcare; and Pedasi or Bocas del Toro for quieter coastal life.
Spain: The Costa Blanca (Alicante, Torrevieja, Jávea) and Costa del Sol (Fuengirola, Estepona, Nerja) for sun and big British communities, the Balearic and Canary Islands for scenery, and cities like Valencia for culture at lower cost.
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