Luxembourg ranked in the top 3 in Europe for affordability of life

Moving to another country is a step that people decide to take for a variety of reasons: career, climate, finding a work-life balance. But one of the key factors is affordability of life. To find out which European countries are the most financially advantageous, the Compare the Market (AU) team analysed taxes, mortgage interest rates, electricity, petrol and food prices.

Romania came first with a final score of 70.18 out of 100. Despite a relatively low average income (€5,047 per year), the country stands out for its low income tax (10%), moderate mortgage rates (6.08%) and affordable living costs: petrol at €1.37/litre, electricity at €0.60/kWh and groceries at just €38.16 per week. This makes Romania attractive for freelancers, young professionals and families.

In second place is Bulgaria (65.99 points). The average income here is slightly higher (€6,339) and the mortgage rate is only 2.77%. Prices for groceries (€44.47) and petrol (€1.32) remain among the lowest in the region.

Luxembourg ranks third with an index of 63.86. Despite high taxes (up to 42%) and expensive groceries (€81.05 per week), the country remains attractive thanks to its high income (€26,628 per year) and stable economy. It's a place for those who place a premium on quality of life, security and access to an international career.

The UK rounds out the top 20 (50.45 points): with moderate prices for electricity (€0.11) and groceries (€50.41), income and taxes (45%) make life less budget-friendly than, for example, in Eastern Europe.

Interestingly, countries such as Iceland, Portugal and Switzerland found themselves at the bottom of the overall ranking despite high salaries. They were let down by high taxes, expensive real estate and everyday expenses.