Expat pensioners continue to lose out in forex swings

British pensioners living overseas have collectively lost out on a potential €13bn shortfall in their income since the global recession hit due to the falling strength of sterling against the euro, reports foreign exchange broker HiFX.

HiFX calculates that since the beginning of this year, market volatility in the first five months meant an average couple living in the Eurozone could have seen their monthly pension income of £628 worth anywhere between €756 in January to €698 in May, a difference of €58.
 
Director Mark Bodega warns of the likelihood that sterling will weaken further. “With this in mind, those individuals who are budgeting for the coming year will be well placed to set up a regular payments abroad system to transfer their pension income at a fixed exchange rate each month. This will also protect against their pension income decreasing if sterling hits a particularly volatile patch in the near future.”

What’s more, as the average monthly pension income for Brits in Europe dropped by over €250, continuing currency fluctuations mean pensioners are exposing themselves to over £300 a year in bank charges just to transfer their income aboard.

Unfortunately, Brits in Europe are not alone in suffering from currency fluctuations. HiFX reports the worst hit are actually pensioners in South Africa, New Zealand and Australia who’ve seen the domestic value of their state pension in their countries of residence slashed by market volatility. By way of example, South Africa-based expats have experienced a difference of ZAR600 a month in the first five months of the year, New Zealand expats NZ$154 a month and Australian expats a monthly difference of AUD$85.

However, according to NatWest International Personal Banking’s (NWIPB) fourth annual Quality of Life Index, despite turbulent times, almost two thirds (63%) of UK expats feel comfortable in their current financial position, with a further 89% remain convinced they made the right decision to live abroad

The majority of UK expats living in China, UAE and Australia believe they have strong economic growth ahead; those in European countries fear a slow road to recovery, according to the survey.