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How Spain’s cost of living increase is worse than in France and Germany

Eurostat data reveals that Spain is the major EU economy where people are having to deal with the biggest rise in prices, from electricity and fuel, to food and travel costs. 

spain inflation cost of living
The Spanish government has implemented measures aimed at stopping the spiralling costs of electricity, fuel and rent, but the evidence suggests that they haven't been fully effective. (Photo by Gabriel BOUYS / AFP)

Although the price of goods and services has risen exponentially across the European Union over the past year, the EU’s Harmonised Index of Consumer Prices (HICP) showcases how Spain is where the cost difference is greatest, especially when looking at the EU’s largest economies: Germany, France, Italy and Spain. 

The HICP represents the change over time in the prices of consumer goods and services purchased by euro area households.

It’s “harmonised” because all the countries in the EU follow the same methodology, ensuring that the data for one country can be compared with the data for another.

Spain is moving past most of its European neighbours in terms of this harmonised inflation rate. It’s 1.8 percent higher than that of the eurozone and 0.9 percent above the EU average.

Spain’s HICP stood at 10.7 percent in July compared to 6.8 percent in France, 8.4 percent in Italy or 8.5 percent in Germany.

Source: Eurostat

There are 13 other EU nations where the HICP is higher than Spain’s (including Lithuania, Latvia and Estonia where the rate is now above 20 percent), but these are deemed smaller EU economies. 

Based on data from Spain’s National Statistics Institute, the biggest price increases in July 2022 compared to figures from July 2021 were electricity (49 percent more expensive), hotels (33.8 percent more costly), fuel and gas (23.9 percent higher), international flights (+21.6 percent) and grocery shopping (+13.5 percent).

The Spanish government has implemented measures aimed at stopping the spiralling costs of electricity, fuel and rent, but the evidence suggests that they have been less effective than similar methods used in the EU’s other major economies, despite the fact that Spain is less dependent on Russian gas. 

According to Spanish think tank Funcas, the country’s inflation rate will remain in double digits throughout August and will start to drop throughout autumn until reaching 8 percent by December. 

INE reported in mid-July that the country’s 10.2 inflation rate was the highest level the country had experienced since 1985

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BRITONS IN SPAIN

Can British people in Spain claim the UK’s winter fuel payment?

In the UK, there are various benefits available to help eligible people through the cold winter months – one of which is the winter fuel payment. But can Britons living in Spain claim this benefit to cover the cost of heating their Spanish homes?

Can British people in Spain claim the UK's winter fuel payment?

Energy costs are on the up in Spain, and with the winter fast approaching the added cost of paying for heating when the mercury drops can result in some very high bills.

Not all of Spain has freezing winters but there are often cold spells and many houses in the country tend to get even colder than it is outside.

READ MORE: Why are Spanish homes so cold?

The average winter temperature across Spain is 8C (1981 to 2010 average). That’s higher than the average in other European countries, but in Spain’s interior and mountainous areas it can be truly chilly from November to March.  

That means that overall, there’s a chance you’ll need to use a radiator or the central heating to keep your Spanish home warm.

So are some of the 400,000+ UK nationals who reside in Spain eligible for winter fuel financial support from the UK?

What is the UK’s winter fuel payment?

The UK’s winter fuel payment is a tax-free payment to help older people with heating costs during the cold winter months.

Those eligible must have been born before September 26th 1956, according to the UK government website.

How much people receive depends on their age and whether anyone else in the household is also eligible, but the amount is usually between £250 and £600.

I’m a UK national living in Spain. Can I claim the winter fuel payment?

The UK government states that those living abroad can benefit from the winter fuel payment if:

  • You moved to an eligible country before 1st January 2021
  • You were born before September 26th 1956
  • You have a genuine and sufficient link to the UK – this can include having lived or worked in the UK, and having family in the UK

While many EU nations are on the list of eligible countries, such as Austria, Germany, Sweden, and Italy, unfortunately Spain is not on the list.

This means that if you live in Spain, you will not be able to claim the winter fuel payment at all, even if you meet the age conditions.

Why isn’t Spain on the eligible list of countries?

The UK government services website nidirect states that “you cannot get the payment if you live in Cyprus, France, Gibraltar, Greece, Malta, Portugal or Spain because the average winter temperature is higher than the warmest region of the UK”.

This is despite the fact that some parts of Spain are a lot colder than the average UK winter temperatures. This includes cities, towns and villages near mountain ranges such as the Pyrenees or Sierra Nevada, or regions in the interior like Castilla-La Mancha, Aragón​​ and Castilla y León.

According to the British government, during winter the average temperature is between 2 and 7 C in the UK.

READ ALSO: Where are the coldest places in Spain?

Foreigners in Spain used to be able to claim this financial benefit, but it was scrapped in 2015 after many UK taxpayers were angry that UK winter fuel payments were going to help people that lived in countries that were generally warmer than the UK.

READ ALSO: Which UK benefits can Brits keep if they move to Spain?

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