British expat pensioners waste £300 a year on bank charges and can be helped by using regular payments plans, it is claimed.
Over 1,000,000 Brits live abroad and claim state pension and have seen their monthly income depreciate because of currency fluctuations, according to currency experts HiFX.
The further plight of those living in some countries including Canada and Australia whose pensions are not index linked was highlighted recently when they lost a claim in the European Court of Human Rights to have their payments updated in line with inflation.
‘The cost of living for expats receiving a fixed income in sterling has already shot up in the last few years as sterling has depreciated. So this recent ruling that their income will not rise in line with inflation as it does for pensioners in the UK is a double blow for hundreds of thousands of pensioners who are already struggling,’ said Mark Bodega, Director at currency broker HiFX.
The current rules mean that a pensioner who paid National Insurance contributions throughout their working life but moved overseas and took a pension from 1995 still only gets £59.20 per week, compared to the current basic state pension allowance of £95.25 per week.
‘Any pensioners living abroad who want to get the most out of their pension payments and cannot afford to see the value of their pension income decrease any further through currency fluctuation should consider using one of the Regular Payments Abroad services offered by many currency specialists in the UK,’ explained Bodega.
In just the last two years, retired British couples all over the world have seen their monthly pension incomes hit by Sterling’s depreciation. Worst hit are pensioners in South Africa, New Zealand and Australia who’ve seen the domestic value of their State Pension in their new countries of residence slashed by market volatility.
With further falls in the value of sterling predicted if the general election leads to a hung parliament, any British pensioners living overseas who cannot afford to see the value of sterling decrease any further should consider a regular payment service, he added.
This allows British people who have emigrated or retired abroad to manage their currency payments via direct debit and protect themselves against currency fluctuation by fixing exchange rates for between six and twelve months. ‘HIFX do not charge their customers to send money overseas through their regular payments plan and also eliminate all receiving charges,’ said Bodega.
HiFX has calculated that, each month that the average retiree living abroad claims their pension through their bank they are charged anything between £10 and £30. On top of this many overseas banks charge average receiving charges of 0.4% of the total value of the monthly pension. This means in a typical year pensioners living abroad are paying over £300 in bank charges and fees just to be able to spend their pension abroad.
Those who are uneasy about fixing the exchange rate for up to 12 months and are more bullish about Sterling’s future should at the very least shop around for better exchange rates and compare the rates offered by their high street bank with a currency specialist particularly one which offers an online service for smaller amounts of money, added Bodega.