Post by Banjo on Feb 28, 2015 8:47:48 GMT 7
This may be of some interest.
Expat pensioners worse off than they were a decade ago
Although better exchange rates mean Brits overseas are doing better than a year ago, the ten year picture is a gloomy one
Many British pensioners who have retired overseas are currently enjoying a pay rise compared with a year ago thanks to the strengthening of the pound.
In the most popular retirement spots such as Continental Europe and Australia, they are benefitting from a much improved exchange rate. Those in the eurozone are nearly 10pc better off, while in Australia they are more than 5pc richer.
New Zealanders have seen their pounds stretch 13pc further since last February and Canadian expats are 9pc better off. The main exceptions are the United States and Switzerland, where the pound is languishing at weaker levels than a year ago.
But if you look back over a decade, two thirds of expat pensioners remain worse off because of the exchange rate, according to figures from Equiniti, which manages the payments of over 60,000 expat pensions.
Among the lucky few who have seen a significant rise in spending power are those who chose sunny South Africa and Jamaica to retire. In those locations, their money buys over 50pc more in the local currency now than 10 years ago.
Andy Brown, director at Equiniti, said; “Expat pensioners are always at the behest of the currency exchange rollercoaster and the pound strengthening over the last 12 months has been a welcome relief for most, especially those in the eurozone.
“However, many pensioners are still much worse off than a decade ago, especially those that retired in the United States, Canada, New Zealand and Australia. The hardest hit are those receiving their pension in Switzerland, Thailand or the Philippines.”
Another issue for around 560,000 British pensioners living in Commonwealth countries such as Australia, Canada, South Africa and New Zealand is that of frozen pensions. These pensioners do not receive any annual increase in line with inflation – despite a longstanding campaign.
(I've removed this table as it does not copy well, still interesting).
Of course, the level of inflation locally will also eat into how far your British pension will stretch. South Africa, for instance, has averaged 6pc inflation a year over the last 10 years, Australia has seen a 3pc annual rise in the cost of living while most of the eurozone averaged just 2pc.
The buying power of the pound is often a driving force behind choosing where to retire abroad. In 2007 when sterling was weak, government figures show the numbers retiring abroad fell. During the credit crunch when sterling fell so low that a pound bought close to one euro, many British pensioners sold up and moved back to the UK as they could no longer afford their life in the sun.
“The expat community are in tune with the exchange rate,” said Mr Brown. “They talk about it as much as we talk about the weather in the UK.”
A fluctuating exchange rate makes it hard to budget. One way to avoid it is to fix your exchange rate for a period of time.
For those receiving a regular income from their pension, most currency specialists offer a regular payments service where you can lock into an exchange rate for up to 24 months. You can set up a direct debit to transfer funds from your account with your foreign currency broker to your local bank every month.
“Buying currency on a regular basis is time consuming and currency fluctuations can make budgeting impossible particularly for pensioners who like the peace of mind of knowing exactly how much their pension is worth each month,” said Mark Bodega of HiFX.
“Also the international transfer fees and commission charged by the banks can soon add up to a tidy sum. Depending on the amounts a client is sending they could save thousands of euros a year on bank charges alone.”
www.telegraph.co.uk/finance/personalfinance/expat-money/11440241/Expat-pensioners-worse-off-than-they-were-a-decade-ago.html
Expat pensioners worse off than they were a decade ago
Although better exchange rates mean Brits overseas are doing better than a year ago, the ten year picture is a gloomy one
Many British pensioners who have retired overseas are currently enjoying a pay rise compared with a year ago thanks to the strengthening of the pound.
In the most popular retirement spots such as Continental Europe and Australia, they are benefitting from a much improved exchange rate. Those in the eurozone are nearly 10pc better off, while in Australia they are more than 5pc richer.
New Zealanders have seen their pounds stretch 13pc further since last February and Canadian expats are 9pc better off. The main exceptions are the United States and Switzerland, where the pound is languishing at weaker levels than a year ago.
But if you look back over a decade, two thirds of expat pensioners remain worse off because of the exchange rate, according to figures from Equiniti, which manages the payments of over 60,000 expat pensions.
Among the lucky few who have seen a significant rise in spending power are those who chose sunny South Africa and Jamaica to retire. In those locations, their money buys over 50pc more in the local currency now than 10 years ago.
Andy Brown, director at Equiniti, said; “Expat pensioners are always at the behest of the currency exchange rollercoaster and the pound strengthening over the last 12 months has been a welcome relief for most, especially those in the eurozone.
“However, many pensioners are still much worse off than a decade ago, especially those that retired in the United States, Canada, New Zealand and Australia. The hardest hit are those receiving their pension in Switzerland, Thailand or the Philippines.”
Another issue for around 560,000 British pensioners living in Commonwealth countries such as Australia, Canada, South Africa and New Zealand is that of frozen pensions. These pensioners do not receive any annual increase in line with inflation – despite a longstanding campaign.
(I've removed this table as it does not copy well, still interesting).
Of course, the level of inflation locally will also eat into how far your British pension will stretch. South Africa, for instance, has averaged 6pc inflation a year over the last 10 years, Australia has seen a 3pc annual rise in the cost of living while most of the eurozone averaged just 2pc.
The buying power of the pound is often a driving force behind choosing where to retire abroad. In 2007 when sterling was weak, government figures show the numbers retiring abroad fell. During the credit crunch when sterling fell so low that a pound bought close to one euro, many British pensioners sold up and moved back to the UK as they could no longer afford their life in the sun.
“The expat community are in tune with the exchange rate,” said Mr Brown. “They talk about it as much as we talk about the weather in the UK.”
A fluctuating exchange rate makes it hard to budget. One way to avoid it is to fix your exchange rate for a period of time.
For those receiving a regular income from their pension, most currency specialists offer a regular payments service where you can lock into an exchange rate for up to 24 months. You can set up a direct debit to transfer funds from your account with your foreign currency broker to your local bank every month.
“Buying currency on a regular basis is time consuming and currency fluctuations can make budgeting impossible particularly for pensioners who like the peace of mind of knowing exactly how much their pension is worth each month,” said Mark Bodega of HiFX.
“Also the international transfer fees and commission charged by the banks can soon add up to a tidy sum. Depending on the amounts a client is sending they could save thousands of euros a year on bank charges alone.”
www.telegraph.co.uk/finance/personalfinance/expat-money/11440241/Expat-pensioners-worse-off-than-they-were-a-decade-ago.html