Expat British pensioners and baby boomers are homeward bound to blighty

by Ray Clancy on April 11, 2011

Euro to sterling issues

Older British expats living in Europe have potentially lost out on over €3 billion on pension transfers over the last two years and are now returning according to figures from a currency specialist.

Over half, some 56%, of Brits aged over 55 are sending money back to the UK, indicating that that those who retired abroad are feeling the strain of the economic downturn, selling up permanently and returning all their assets to the UK, a study from HiFX claims.

It sys it has seen a 175% increase in the number of euro to sterling transactions and a 120% increase in the number of US Dollar to sterling transactions compared to the same time last year.

Not only are the over 65s the group most likely to be repatriating money but they are also sending home the largest amounts. In the last six months almost a third, 32%, of transactions over £70,000 have been made by this group. The amount of money baby boomers, that is people aged 55 to 64 years old, are sending back to the UK has risen by 12% since 2009.

‘With the volatility of the pound and a degree of uncertainty remaining around the global economic climate Brits are continuing to feel the pinch and act cautiously. According to many of our clients they are returning home to the UK after seeing their savings and income stripped by the plunging values of the pound,’ said Mark Bodega, Director at HiFX.

‘They are selling property and other foreign assets. Expat pensioners have also seen their income slashed by a third. When faced with this drop it’s no surprise that we are seeing more and more selling up and returning home,’ he added.

Overall, HiFX has also seen a significant drop in the number of people sending small amounts back home with almost a quarter, 23%, repatriating £30,000 to £69,000. It says this suggests that many Brits are making a permanent move back to the UK and due to the exchange rates they have built up their cash before sending it back to the UK to try to get better value.

In the last two years, the 1.2 million retired British couples all over the world claiming a pension have also seen their monthly pension incomes hit by Sterling’s volatility. The worst hit expat pensioners are in South Africa, New Zealand and Australia. In comparison to the highs of 2008 a pensioner in Australia would now be AUD$973 worse off on a couple’s pension value of £846.30.

‘With further sterling volatility predicted, any Brits who cannot afford to see the value of sterling decrease any further should consider services offered by many currency specialists in the UK, such as a Regular Payments Abroad service,’ said Bodega.

Typically clients who use this service are making monthly transfers for a variety of reasons including mortgage payments, pension transfers, salary transfers, and repatriation of rental income.

For those buying currency on a regular basis it can be time consuming and currency fluctuations can make budgeting impossible, Bodega points out. Also, the international transfer fees and commission charged by the banks can soon add up to a tidy sum.

‘Unlike your bank, the larger more established currency companies will allow customers to automate their payments via direct debit and fix the exchange rates for up to 12 months ahead so customers know exactly how much is being transferred every month,’ he explained.

‘Using direct debit, can save people up to £300 on transfer fees alone as the banks charge transfer fees of up to £30 on each and every transaction. In addition customers make further savings as they’ll also avoid the other charges such as and overseas bank receiving fees.

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.

{ 1 comment… read it below or add one }

Expat Woman April 17, 2011 at 4:14 am

So much uncertainty out there these days. Was planning to move to Thailand this year but I just don't know at this point.


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