Offshore savings Updated:
Thanks to the falling strength of the pound, British retirees living abroad who claim UK state pension have potentially lost out on over £10.6bn in income since 2007, a leading foreign exchange specialist has said.
The research, published by HiFX, analysed the top 13 countries where some 2 million British expat pensioners live and receive the state pension, finding that the value of their monthly payments has significantly dropped in value.
The figures reveal that those in the Eurozone could have seen their monthly state pension of £440.60 drop in value by an average of €145.20 in the last six years, with it being worth €655.60 in April 2007 and just €510.40 in April 2013.
But, expats living in Switzerland fare even worse – they'd have once received 2.43 Francs against the pound but today that's gone down to just 1.41 Francs, equating to a substantial drop in income.
Analysis reveals that those in South Africa, however, get the best returns on their state pension – currently they're achieving ZAR13.70 against Sterling, with the rate having only marginally fallen from ZAR14.40 in April 2007.
Experts believe that the on-going financial crisis is to blame for the drop in income, with it hugely impacting exchange rates over the last few years. But, with Sterlingvolatility set to continue there's no easy answer for pensioners feeling the pinch.
They're being urged to shop around for better exchange rates to make the most of their money, or they might want to consider switching to a Regular Payments scheme offered by a lot of currency specialists to ensure they don't suffer further decreases should the value of Sterling continue to decline.
Mark Bodega, director of HiFX, comments on the research:
"The global economic downturn hasn't settled down in any way. Unfortunately, Brits living abroad and receiving a fixed income in Sterling have been hit particularly hard.
"With further Sterling volatility predicted, pensioners who cannot afford to see the value of their pension income decrease any further should consider using one of the Regular Payments schemes offered by many currency specialists in the UK [or] should at the very least shop around for better exchange rates."
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