Retire to Europe – Option 1 - Malta

As a British Citizen I am in the enviable position of having the right (at least for now) to take up residency in any 1 of 26 other EU countries.  Countries as far north as Finland, as east as Cyprus, as west as Portugal and as south as Malta.  A melting pot of languages, cultures and history which when combined provides for a myriad of potential lifestyle options and life experiences.

Prior to retirement these options can be limited as you’ll likely be making decisions based on where you can get work and your language skills but once you reach financial independence these become less of a barrier as you:

• won’t need to consider how to make a living through work;
• many potential side hustles/jobs can still be performed in your native tongue/s; and
• you’ll have time on your hands to learn the local language.

Of course as Ermine’s comment rightly pointed out in the Transition to Retirement post your human setting, which include access to family and friends, will also likely be a limiting factor on packing up and moving to a new country for many.  Personally I'm in the fortunate (or unfortunate depending on how you look at it) position of having few ties to the South East of England but instead have family and friends spread far and wide throughout the world.  This includes a healthy number of good friends and family on the Continent.  This means that a move to Continental Europe actually brings some family and friends closer while I leave some good friends in the South East.

My current plan has me moving out of London and the South East of England to either another UK location (Shropshire or Suffolk being current favourites) or to Europe.  A large driver of this is the price of housing and other basic costs in the South East.  By moving away I will be presented with the opportunity for a more fulfilling life as I’ll have the opportunity to move further up Maslow’s Hierarchy of Needs pyramid shown in the figure below.  In brief Maslow detailed that every person has the desire and ability to move up the pyramid but they cannot move onto the next level of the pyramid until they have met the needs on the lower level.  By moving away I won’t have to expend as much of my retirement wealth (nor worry about it as it won’t represent such a large a portion of my total assets) on the lower Physiological Basic Needs which includes Shelter and providing a pick a Safe retirement location I’ll be able to concentrate on moving through Belonging, Self-Esteem and hopefully achieve Self-Actualisation.

Click to enlarge (Source: www.simplypsychology.org)

I still have a number of years before I have to make the final decision on location but if I was forced to choose a European destination today Malta would be high on the list.  I've been fortunate to visit a few times over the past 5 or so years and in more recent times have really tried to focus on what it would be like to live there in financial independence as opposed to holiday or work there.   It’s a country that I find surprisingly few people I come across really know much about so let me first set us right from a geography perspective.  Malta is small at only 122 square miles and is actually an archipelago in the Mediterranean ocean with the three largest islands (in descending order of size) being Malta, Gozo and Comino.  Malta has a population of only around 450,000 but because of its small size is actually the eighth most densely populated country in the world.  So why am I considering Malta?  This is probably best answered by looking at the Pro’s and Con’s as I see them today.

Pro’s of Living in Malta

While Maltese is the constitutional national language, English is an official language and I have found very widely spoken.  This would mean initial settling in would be easier and should a problem arise before I could speak Maltese fluently then solving it shouldn't be limited by language.

A Mediterranean climate.  If I was to be picky peak summer might be a little hot but as a 44 year old retiree I won’t have to dress for work (shirt, tie and trousers) plus can stay out of the sun in the heat of the day making this a minor inconvenience only.  Firsthand experience also tells me that winter, while mild on paper, with average lows of only around 9 Celsius in January, can get very windy and actually feel very cold as a lot of the buildings are not designed for cold conditions.  Damp and mould are also common problems from what I can see.

An integrated bus system which provided I am patient has enabled me to travel around Malta without difficulty.  This would mean I would not need to run a car which would save valuable wealth for other activities.  The only negative is that in more recent times they've gone from buses such as these:

Click to enlarge

which were filled with personality and were cheap to use.  To these:

Click to enlarge, (Source: www.arriva.com.mt)

which have no personality and aren’t so cheap to use.

Plenty of opportunities for adventure.  Views like this:

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terrain like this:

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and, history like this:

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all within a short bus ride from wherever I live is going to keep me fit, healthy and content for a very long time.

I’d initially rent in Malta to enable an easy escape in the event that all the visits and research had led me up the right path.  This will be far cheaper than the South East of England.  As an example this is what you get 5 miles west of London for £800 per month:

Click to enlarge, (Source: www.rightmove.com)

Yes ladies and gentleman what you are looking at is a House Share (not a flat or house but a house share!) where you get a room plus access to some shared facilities.  One of the unique marketing points is that each room has individual locks for guaranteed privacy!  In contrast move 5 miles west of Valletta to Zebbug and you get this for EUR885 per month:

Click to enlarge, (Source: www.remax-malta.com)

Click to enlarge, (Source: www.remax-malta.com)

That is a 3 bedroom house of character which includes a garden and a cellar in a nice residential area.

Other Physiological Basic Needs.  Electricity, water, internet (although I would say not a Basic Need) look to be about the same cost as the UK.  Providing you buy local brands or from local vendors food looks cheaper than the UK.  You also don’t have to worry about costs like a TV licence (again not a Basic Need).

Good healthcare.  Malta was ranked number 5 in the World Health Organisation’s World Health Report 2000.  Having had the misfortune of having to use the system I can only say that the hospital I used was clean, efficient and very professional.  As a person who would initially be of non-retirement age I should qualify for emergency medical help under the Reciprocal Health Agreement between Malta and the UK but the method I would likely use would be to simply pay Maltese Social Security Contributions.  As I’d be a “Self Employed Person” who received income from rents, investments and capital gains I’d pay Malta Class 2 Social Security Contributions which for me would be 15% of my annual net profit/income brought into Malta (more on that below).  Social Security payments would also provide other benefits other than just healthcare such as a Contributory Retirement Pension.

A friendly taxation arrangement for an ex Brit who is a non-Maltese domicile such as myself.  For example:

• No tax on overseas capital and overseas capital gains brought into Malta;
• This means I would then only be taxed on overseas “income” actually brought into Malta; and
• Would have no inheritance tax to pay.

The crime rate is low.  For example when it comes to robbery in 2000 the US had 144.92 per 100,000 of population and Japan had 4.08.  Malta was 35.56.  For aggravated assault Japan had 23.78, the US 323.62 and little Malta a low in comparison 18.27.

Even though Malta is a series of islands the European mainland is not far away.  A ferry journey of 1.5 hours will see you travel from Malta to Pozzallo, Sicily in Italy and from their Europe is your oyster.

Con’s of Living in Malta

English is an official language.  With English being widely spoken I may never actually learn to speak another language fluently.  As opposed to plonking myself in say Bulgaria where I’d need to learn quickly.

The driving.  Let’s just say that I've travelled to many countries for work including India.  Maltese driving on the whole must be some of the worst I've seen.

I would like to develop a level of self sufficiency.  In my travels around Malta I've seen some small farms but houses with a bit of land seem few and far between.  I assume this is because of the population density.  Additionally the landscape does not generally look very fertile meaning this could prove more difficult to achieve than say in the UK or some other European countries.

Even though Italy is only 1.5 hours by ferry it may become a psychological barrier between family/friends on Continental Europe.

I could continue to run through other Pro’s and Con’s but hopefully this gives a top level overview of why I'm thinking Malta for retirement.  Are you currently living in or have you lived in Malta?  I’d value your Comments particularly around is my assessment accurate?  As always I’d also be grateful for any Comments from other non “Maltese” readers.  Would you ever consider Malta?  If yes why and if no why not.

As always DYOR.