While their cost of living has increased compared to five years ago, the quality of life for most expats hasn’t reduced, according to the latest Quality of Life index from NatWest International Personal Banking.
Canada has the best quality of life for the third time since the index began and the United Arab Emirates has risen from tenth to sixth position while Portugal has dropped three places to ninth position in the rankings. New Zealand is second, Australia third and France fourth.
Expat financial confidence in Spain, Portugal and France has fallen but the quality of life abroad for seven in ten expats hasn’t reduced and they believe their decision to move abroad was the right one.
But expats have had to make some changes to their way of living as the impact of the global financial crisis bites. They are consciously managing their money more prudently and the number who are reducing their spending on luxury items has increased from 17% in the first year of the report to 44% now.
Nonetheless, 56% are not reporting significant cuts in spending even though the cost of living over the five year period has increased significantly to 71% in 2011/12, almost double that of 2007/8.
Overall, expats’ assessments of their levels of prosperity have remained consistently high. In 2007/8 over three quarters rated their prosperity between ‘comfortably off’ and ‘quite prosperous’ and this has risen to 83% in 2011/12. However, those rating themselves as ‘very prosperous’ fell from 17% to 7%.
Expats living in China, UAE, Hong Kong and Singapore say their financial position has ‘improved dramatically’ since moving to the country. Those living in Australia, Canada, and New Zealand assess their financial position as having ‘improved significantly’. Those living in Western Europe, South Africa and the US are less enthusiastic about the improvement in their financial prospects and reported their financial position to have ‘improved moderately’.
However, expats who moved to the sun in Spain, France and Portugal are counting the cost of their moves as their disposable income is eroded and the cost of living rises. Those living in France, Portugal and Spain are most likely to return home.
Also power shifts and leadership changes across the world have meant that confidence levels in government institutions have fallen across the board. Those that rated their confidence low increased from 13% to nearly a third, 27%.
Multiculturalism, healthcare and rights and freedoms helped Canada stay at the top spot for quality of life. Canada has also come top in the well being index which comprises of six self assessment categories: state of health, degree of prosperity, sense of belonging and acceptance, life satisfaction, sense of achievement and overall level of happiness.
Canada has fared considerably better than the balance of countries hit by the financial crisis. Its recession was the shortest and mildest among the countries that make up the G7, lasting only nine months as compared to a year to eighteen months in the rest of the group.
According to the Organisation for Economic Co-operation and Development (OECD) Canadians pay less tax on income than most in developed countries. The burden of taxes and social security charges paid by Canadian employers and employees is lower than the OECD average for every family type and this difference has widened over the past 11 years.
By any conventional metric, Canada's economic performance can be demonstrated to have surpassed those of its peers during and subsequent to the recession, the report concludes.