Currency fluctuations hit British expat pensioners hardest in Switzerland

by Ray Clancy on June 18, 2013

Currency fluctuations hit British expat pensioners hardest in Switzerland

Currency fluctuations hit British expat pensioners hardest in Switzerland

British pensioners living overseas have potentially lost out on over £10.6 billion of their income since 2007 due to the falling strength of sterling, it is claimed. An analysis of the top 13 countries where over one million British expat pensioners live and receive state pensions by foreign currency specialists HiFX found that those living in South Africa get the best return on state pensions while those in Switzerland fair the worst.

Overall the research shows that an expat pensioner living in the Eurozone claiming state pension abroad could have seen their monthly pension income of £440.60 worth anywhere between €655.60 in April 2007 to €510.40 in April 2013. It means that the average monthly pension for British expats has dropped by over €145.20 since 2007.

‘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, missing out on £8.9 billion since 2007, and could not have failed to notice that they are now receiving less and subsequently now have a big hole in their pension pots,’ said Mark Bodega, director at HiFX. ‘Pensioners have been struck hard by the ongoing financial crisis, as well as importing and exporting volatility which has had a dramatic impact on exchange rates,’ he added.

Expat pensioners in South Africa are getting more for their money at ZAR13.70 against sterling, having fallen from just ZAR14.40 in April 2007. Pensioners in Europe fair the worst due to the ongoing financial crisis hugely impacting exchange rates, they currently get €1.16 against the pound, falling from €1.49 in January 2007. Those in Switzerland have taken one of the biggest hits, going from 2.43 Swiss Francs against the pound to 1.41 Swiss Francs.

Quote from ExpatForum.com : “My husband and I have lived in Malaga for about 10 years. Next year, my husband is due for his uk pension but we have been told by friends that he may not receive the full amount and will be penalised for living abroad. Can anybody enlighten me on this?”

Pensioners in South Africa have seen the biggest return on their state pension, however, South Africa is notoriously very volatile, so they need to consider fixing for 12 months to avoid any drops in their state income,’ said Bodega. ‘For those in Europe, the days of €1.3 to €1.5 against sterling are now over, indeed €1.2 against sterling would now be seen as high. However, pensioners in Switzerland have not only taken the biggest hit in terms of their state income, Switzerland is also notoriously expensive and has high living costs, so pensioners hit will have been struck from both sides,’ he pointed out.

With further sterling volatility predicted, the firm is advising pensioners who cannot afford to see the value of their pension income decrease any further to consider using one of the regular payment schemes offered by many currency specialists. HiFX, for example, runs a regular payment service to enable 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 12 months. HiFX do not charge their customers to send money overseas through their regular payments plan and they also eliminate all receiving charges by foreign banks.

For those who are uneasy about fixing the exchange rate for up to 12 months and are more bullish about sterling’s future the advice is to 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.

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