Retirement
Falling pound batters expats’ state pensions by 8%
British expat pensioners living in Europe have seen their monthly state pension slashed by an average of 8% following recent falls in sterling.
According to financial advisory firm deVere Group, a basic state pension worth €577.37 per month from the beginning of January this year is today worth €530.81. In November 2008, when the pound hit a high against the euro, it was worth €597.41.
deVere Group chief executive, Nigel Green, said: “More than a million Britons who live abroad, receive the state pension and these people – unless they’ve set up a system to transfer their pension at a fixed exchange rate every month – will be worse off each month because of the weakening pound.
“Sterling has recently hit a 16 month low against many major currencies and has plummeted 8% against the euro since the beginning of this year – and has, overall, fallen 9.5% since last summer when it rose to €1.26 in July 2012.
“Naturally, Britons living in Europe and receiving a fixed income through their pension are particularly adversely affected by this.”
Green warns that as the Bank of England and the government is unlikely to move to push the pound higher and that it is unlikely to rise higher anytime soon.
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deVere Group points out that if the pound fell to 1.11, as many now predict, the state pension of expats living abroad would fall by €60.46 per month, or €725.52 over the year.
Expats are being urged to speak with a financial advisor to mitigate the effects of the falling sterling.
Those heading abroad are being urged to shop around for holiday money, as it is now more important than ever to cut down costs and to get the best rates on foreign currency.
Asda Money has a rate sale from 08.00am Tuesday 26th February to 08.00am Friday 1st March so that travellers can pick up currency at a cheaper rate.
The sale will be for the ten most popular foreign currencies like US dollars and the Euro.