Weak pound sees expats lose £10.6bn from pensions

 

More than 1 million British expatriates claiming the state pension have lost in excess of £10.6 billion since 2007, it has emerged.

The claim comes from a foreign exchange company that analysed figures from 13 countries where retired Brits live and found that the weak pound has been costing them dearly.

Research by HiFX discovered that a pension income of £441 a month was worth €656 back in April 2007, but by April this year the same amount was worth €510.

This reduction of €145 in value is significant for expats, especially those living on a fixed income abroad.

These results were averaged out across the countries surveyed, but it is those living in Switzerland who have been hit the hardest.

In 2007 they would have received 2.43 Swiss francs for every pound in their pension income, but now they can only hope to get 1.41 francs.

Mark Bodega of HiFX said: "Pensioners in Switzerland have not only taken the biggest hit in terms of their state income, but Switzerland is also notoriously expensive and has high living costs. So pensioners hit will have been struck from both sides."

There are still some destinations in the world where it pays to be an expat, such as South Africa, but this is due to the local currency, the rand, falling against the pound.

Mr Bodega went on to say that the economic downturn, which has global reach, has not begun to settle down at all.

Pensioners living abroad are among those who will feel it the most as their income is fixed, but exchange rates are not.

He added: "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."

Some expats are feeling the decline in income so steeply that they are having to return to the UK, where they can get more for their pound.

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