Navigating the Cost of Living as an Internationally Mobile Person

Cost of living has been one of the dominant financial themes of the past several years. Global inflation hit levels not seen since the early 1980s, energy and food prices surged, and the real purchasing power of money eroded faster than many financial plans had accounted for.

For internationally mobile people — expats, non-doms, digital nomads, and globally mobile families — cost of living pressure is more complex than it is for people who earn, spend, and save in a single currency in a single country. You face currency risk on top of inflation, cost dynamics that differ dramatically by location, and the specific cost pressures that come with living abroad (international school fees, health insurance, travel back to family, cross-border banking costs).

The Currency Exposure Problem

If you earn income in one currency and spend in another, inflation in your spending country affects you differently from inflation in your income country. A British expat earning GBP and living in Dubai spends primarily in AED (pegged to USD). When GBP weakens against USD — as it did significantly in 2022 — their purchasing power in Dubai fell sharply even if their nominal GBP income was unchanged.

Conversely, when GBP strengthens, their Dubai costs become cheaper in GBP terms. The currency layer adds volatility to an already complex picture.

Practical principles for managing currency exposure:

• Match income currency to spending currency where possible. If you live in Cyprus and spend in euros, holding investment income in EUR or GBP/EUR hedged assets reduces your day-to-day FX exposure.
• Hold a multi-currency cash reserve. Keeping 3-6 months of expenses in the local spending currency avoids being forced to convert at unfavourable rates in a crisis.
• Be explicit about your "base currency." Which currency do you measure your wealth in? Most internationally mobile people still measure against their home country currency (typically GBP or USD). Investment decisions should account for this anchor.

Comparing Cost of Living Across Major Expat Destinations in 2026

Cost of living varies enormously across popular expat destinations, and has shifted materially following post-pandemic inflation and strong expat demand for housing in some markets. The following are indicative comparisons based on typical expat spending patterns as of 2026:

London: Remains one of the most expensive cities globally. Rental costs for a family property in good areas remain very high. However, UK public services (NHS, public schools) reduce costs for those who use them.

Dubai: Has seen significant cost inflation driven by a surge in expat arrivals from 2020-2023. Rents increased very substantially in some areas. School fees at international schools range from AED 40,000-100,000+ per year. However, there is no income tax, reducing the effective cost relative to high-tax jurisdictions.

Singapore: Consistently one of the world's most expensive cities — particularly for housing and cars. International school fees are high. However, income tax rates are competitive, and the healthcare system is high quality.

Cyprus (Limassol/Nicosia): Significantly more affordable than London or Singapore, but has seen substantial property price and rental inflation as HNW expats and corporate relocations have driven demand. Still competitive compared to Western European capitals.

Lisbon: Once considered one of Europe's most affordable capitals, Lisbon has seen dramatic property and rental inflation driven by the golden visa programme (now significantly restricted) and high expat demand. Costs for local residents have risen sharply; expats typically pay premium prices.

Bangkok: Remains significantly cheaper than most Western cities in day-to-day living costs. Healthcare is affordable and high quality. International school fees are lower than Dubai or Singapore equivalents.

Barcelona/Costa del Sol (Spain): More affordable than major UK cities for day-to-day costs, but property has appreciated significantly in popular coastal areas and Barcelona itself. Healthcare is accessible and good quality within the EU framework.

The School Fees Challenge

For families with children, international school fees are often the largest single cost item after housing. The scale of the financial commitment is frequently underestimated:

• International school fees range from approximately £12,000-£35,000 equivalent per year per child, depending on location and school.
• Fees have risen faster than general inflation in most markets over the past decade.
• Fees typically increase annually, and once your child is established in a school, changing is difficult.
• Secondary school years are typically more expensive than primary.
• University costs (if your children attend internationally) add another layer: UK university tuition fees for home (domestic) students are capped at £9,535/year for 2025/26, rising to £9,790 for 2026/27, but international students pay significantly more. US university costs with board are typically $50,000-$80,000+ per year.

Planning for education costs requires early action and long-term commitment. Starting to save when children are young — using regular savings plans, offshore education savings plans, or Junior ISAs where eligible — is essential. The mathematics of compounding are powerful when the time horizon is long: consistent saving from birth can accumulate meaningfully by the time university fees arise.

Housing Cost Strategies

Housing is usually the largest single cost for internationally mobile families. Several strategies help manage it:

Rent before you buy. In a new location, renting for 12-24 months before deciding whether to buy gives you time to understand the market, find the right neighbourhood, and avoid overpaying in areas that turn out to be less suitable. This is particularly important in markets that have seen rapid recent price appreciation.

Negotiate. In many expat markets (particularly corporate relocations), initial rent quotes are negotiable, and longer lease commitments often attract discounts.

Consider currency hedging on housing costs. If your rent is denominated in a foreign currency and you receive income in another, even simple steps — keeping a buffer in the local currency, or using forward contracts for large annual payments — can reduce FX cost volatility.

Own in your strongest currency. Holding a property in a currency other than your financial base introduces both upside and downside currency risk. If you buy a Dubai property in AED (USD-pegged) but your wealth is primarily in GBP, a weak pound means your Dubai asset has performed well in GBP terms — but a strong pound means the reverse.

Building a Budget That Works Internationally

A practical framework for internationally mobile financial planning:

• Allocate roughly 50% of take-home income to essential expenses (housing, food, utilities, transport, insurance, school fees) denominated primarily in the local currency.
• Allocate 30% to savings and investments. Keep these in your base currency (typically GBP or USD) or diversified across currencies. Prioritise tax-efficient wrappers where available.
• Allocate 20% to discretionary spending — travel (including visits home), entertainment, lifestyle costs.

This is a rough framework, not a rigid rule. The key principle is that essential expenses should be covered by reliable income in the same currency, and savings should be systematic, not residual.

The Specific Costs of Being an Expat

Beyond core living costs, internationally mobile people face specific costs that often surprise those new to the lifestyle:

• International health insurance (IPMI): A good international health plan costs £3,000-£10,000+ per year per adult, significantly more for families. It is non-negotiable.
• Travel home: Regular visits to family in the UK or home country are a real budget line, particularly with a family.
• Cross-border financial costs: International wire transfers, currency conversion fees, and non-resident banking charges add up. Using specialist currency transfer services (rather than high-street bank rates) for large transfers saves meaningfully.
• Professional advisers in multiple jurisdictions: Tax returns in multiple countries, local legal advice, international financial advisers — the advisory costs of being globally mobile are higher than for a domestic resident.
• Relocation costs: Moving internationally every few years involves estate agent fees, shipping costs, deposits on new rental properties, and school registration fees.

How Global Investments Can Help

Global Investments works with internationally mobile clients to build financial plans that account for the real costs of a globally mobile life — multi-currency income and expense matching, education planning, international health cover, and investment strategies that are robust to cost-of-living pressures across multiple jurisdictions. If you are planning a move abroad or are already living internationally and want to stress-test your financial plan, speak to one of our advisers.

This article is for general information only and does not constitute financial advice. Cost of living figures are illustrative and change over time. Currency values and investment returns can fall as well as rise. Always seek professional advice tailored to your circumstances.