New Zealand cheapest destination for expats

New Zealand has topped a list of the cheapest destinations for expats with the cost of living a third less than the UK.

Research by foreign currency broker Foreign Currency Direct also found British expats living in Australia enjoyed a cost of living 22% lower than in the UK.

However, apart from Italy and Cyprus, the devaluation of the pound against the euro could price many British expats out of living in the Eurozone. At the current rate of exchange, Britons are paying an extra 10% on purchases in Euros compared to September 2008 rates.

The research found France is the most expensive destination of choice for British expats, costing over a third more than the UK. With current exchange rates, the cost of living in Portugal is about 14% higher than the UK, while Spain is approximately 11.5% and Greece 3% more expensive.

However, Italy and Cyprus have bucked the trend of expensive Eurozone destinations. According to the research, Italy is the third most popular country where Brits would like to own a property, with the cost of living nearly 14% cheaper than in the UK while Cyprus is almost 8% cheaper.

Looking to North America, the cost of living in the US is almost 5% more expensive in the UK, while Canada is about 0.5% cheaper.

"Relative to the Euro, exchange rates between the pound and the New Zealand and Australian dollar have remained surprisingly stable over the last six months," says Peter Ellis, chief executive of Foreign Currency Direct.

"Coupled with an overall lower cost of living, and the promise of sun, sea and scenery, Australia and New Zealand are becoming increasingly attractive destinations for British expats," he says.

Ellis believes Britons should not only consider the quality of life and cost of property overseas but be aware of significant variations in the cost of living too.