British expat pensioners already hit by Brexit due to currency fluctuations

by Ray Clancy on July 5, 2016

Retired British expats with state pensions living in countries such as Canada, Australia, South Africa, New Zealand and the United States are already suffering as the result of the UK’s decision to leave the European Union.

They receive their pension from the UK in Sterling and it is not index linked, as it is for expats in EU countries like Spain and France, but have now suffered a double blow due to currency fluctuations caused by Brexit.

STERLINGsymbolThe dramatic fall in the value of sterling due to the vote meant that pensioners were in effect 8% to 10% worse of if they were living in the US, Australia and Canada. The International Consortium of British Pensioners has warned that if the Pound stays low it could force expats to move back as they cannot afford to live on their pension.

For example, someone in their eighties living on the UK basic state pension of £260 a month living in Canada would have had a pension of Canadian $488 on the day of the vote but the following week this fell to $451, a drop of almost 8%.

Those living in the US, Australia or Spain with the same basic amount would have seen their pension fall to 9.3%, 8% and 7.5% respectively. Those living in countries that don’t have reciprocal agreements with the UK don’t see their pension rise, but all expats face a fall in any income that is paid in Sterling as a result of the vote.

It is thought that more than 1.2 million people living abroad receive a UK state pension, which is either paid into a UK bank or into an overseas account in the local currency, usually monthly. Those opting for the latter are used to the amount they get varying because of exchange rates.

Meanwhile, varying messages have been voiced by the candidates standing to become the next Prime Minister of the UK regarding the rights of EU citizens being able to remain in the UK after Brexit and the rights of British expats living in the UK.

Some say there can be no guarantees that EU citizens can stay unless there is a reciprocal agreement between nations. And one candidate, Michael Gove, has repeated that he will introduce an Australian-style points system for visas if he gets the top job.

Such a points system would set out a number of requirements for migrants before they attempt to enter the UK. For example, they would need to gain 60 points in order to enter Britain, and be aged under 50. Although applicants aged between 25 and 32 would automatically start at 30 points. People aged between 45 and 49 would start with none.

Points could be given for certain qualifications and employment histories. These can be gained inside or outside Britain. A doctorate from a University, for example, could be worth 20 points. Candidates would also be able to gain points if they previously worked in the UK.

All migrants would have to demonstrate basic competence in English and would be given points if their language skills were deemed ‘proficient’ or ‘superior. Some visa applications would require sponsorship from an employer or family member. They could also get one from the Government.

{ 1 comment… read it below or add one }

Jane Davies July 5, 2016 at 5:41 pm

I would just like to point out that British pensioners in the USA are not victims of the frozen state pension scandal. They get their pensions index linked like those in the UK, EU and many other countries around the world.
I’m surprised an expat forum is not aware of that.

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