Green parrots flutter in the palm trees under a blue Spanish sky and the tapas restaurants and gift boutiques still outnumber the jostling British and Irish pub signs. Just.

A brisk westerly wind blusters through the high-rise hotels and apartment blocks of the Costa del Sol, but the sun is warm. Along the urban stretch south of Málaga that runs from Torremolinos to Benalmádena and on to Fuengirola, Spanish families promenade along the seafront. But up around Benalmádena’s Bonanza Square, the bars are almost exclusively stocked with Brits, residents and holidaymakers: the middle-aged and the retired.

It’s a friendly, noisy place. Richie Hart has been in Málaga province for 18 months with his partner Kay Ritchie – they work long hours running their Welsh-themed bar. “There’s around 50 bars in this strip and I’d say about five are Spanish-owned,” said Hart.

Everyone knows that, if Britain leaves the European Union, the lives they came here for could change. One million of the 5.5 million Brits who have moved abroad live in Spain, and anyone who has lived here for less than 15 years, can vote in the in/out referendum on 23 June. Many keep up with the news at home through ferociously Eurosceptic newspapers such as the Daily Mail, but Brexit viewed from Spain carries its own specific risks. There is anxiety on the costas.

Audrey, a neatly dressed woman in her late 80s who has come in to the bar for her daily tonic water, has been in Spain for 37 years. “And not a word of Spanish,” laughed Lisa Richards, 46, who works for a Spanish real estate firm and is fluent.

Audrey is worried about her pension. “Have a look at the papers today,” she said. The front page of two of the three English-language newspapers here cover the report released by the UK Cabinet Office warning that expatriates would lose “a range of specific rights to live, to work and to access pensions, healthcare and public services that are only guaranteed because of EU law”. It adds: “UK citizens resident abroad, among them those who have retired to Spain, would not be able to assume that these rights will be guaranteed.”

Healthcare that is currently free at the point of use in Spain is paid for by the NHS, although as only a third of the British population officially register themselves, Spain’s health ministry has long made the point that it is being short-changed on this deal.

Richards has her job to consider. “A lot of the property here is sold to Brits: they’re a big market. It’s easy to buy at the moment, and if the EU regulations no longer applied then it would definitely make the process of buying more complicated.

“I think if we come out of Europe, Brits won’t buy any more. There will be extra taxes. I’ve lived here for seven years, and I have had to work really, really hard to get a good job. You start at eight and you work until eight, but a few years ago I tried to move back to Wales and I was told by the council I might as well get myself a cardboard box to live in and there was no work.”

She doesn’t intend to vote in the referendum – something which upsets Libby, a retired midwife from Lancashire, who splits her time “50‑50” between Spain and the UK. She rents a flat here but says she doesn’t live here permanently because insurers in the UK demand you spend at least six months in the country.

British expat Richie Hart outside his Welsh-themed bar. Photograph: Andy Hall/The Observer

“I voted for the Common Market when I was 18. I’ll vote to stay in now. If we leave, we are not going to have any links anywhere any more. We’ve no industry, we’re just a service industry.

“But the sad thing is that British people will just vote the way they are told to vote by the Sun or the Star or the Mail, because the majority won’t think for themselves or even bother to vote at all.

“Out here, a lot of people won’t bother to register to vote. What you find is that you talk about Brexit and everyone starts talking about migrants. The British are the only ones who don’t understand that the migrant thing is going to happen whether we’re in the EU or not.”

However, she does feel the welfare state in the UK is skewed towards immigrants. Next to her, an Englishman who lives in Spain, who doesn’t want to be named, says that David Cameron has let too many immigrants get the vote, meaning it’s more likely that Britain will stay in. “It’s in their interest to send all the money back to their families, so British people don’t stand a chance.” Does he vote in Spain? “I’m not taking Spanish citizenship, I’m English!”

For bar manager Richie Hart, the fears are economic. “Our regulars are already suffering because as soon as talk of the referendum started the euro rates went down, so people getting their money from Britain get less. This is no dream life out here: we work very hard and can’t afford to employ anyone – the costs of that are really high in Spain. Nor do the Spanish care if we succeed or not. If I have to hand the lease back, the government will get a cut from the lease being sold on again, so why would they care? If leaving the EU has a big effect on the bars then we’d have to get other jobs. We can’t go back: the employment situation in south Wales, where I’m from, is nine out of 10 men out of work.”

Next door to Hart of Wales is Paddington’s, where Rick Wiles is minding the bar for his friend. He left Wilmslow, Cheshire, for Spain 25 years ago and retired eight years ago. He is fluent in Spanish and has no desire to go back to the UK and what he sees as its CCTV culture.

“There’s nothing cataclysmically different about living here than anywhere else in the world, but it suits me: it’s warm. Nobody has a blind bloody clue of what will happen, but it’s not going to affect me. I don’t own a property and I don’t take my British pension.

“The Spanish don’t give a monkey’s, they don’t support every migrant from the rest of Europe like Britain does – they blame the English for everything that goes wrong, but it makes no sense to make life difficult for people living here.

“The best thing for the British economy would be to get out of the EU. We’re in for the wrong reasons. The Common Market was designed by politicians to keep Russia out and now the reason has gone. My view of Brussels is that the more institutions you have, the more money you spend that need not be spent.”

Nine EU nations have 20,000 or more British residents. But among the millions of British people living abroad, Spain is the most popular European country followed by Ireland and France. British children make up almost 20% of the immigrants in Málaga’s schools, by far the largest group. About 3,000 UK nationals get unemployment benefits in Spain.

Natalie Mills, 21, works in an Irish pub in Torremolinos and went to school here after her family moved out in 2000. “My mum and dad are a bit worried now the polls are moving to show [Brexit] could happen. I don’t know if they’ll kick us out. My brother was born here, so he has a right to stay, but I don’t know if I would. I haven’t got a resident’s permit yet, but I’m applying for one now. But all the bars here really rely on British people coming here – so if it was harder for them to come, that’s a whole part of the economy that’s going to crash.”

There will be some anxious faces glued to the television screens in Paddington’s come 23 June.