Advertisement feature

British pensioners lose £10.6 billion by living abroad

Research from currency specialists HiFX shows that falls in the pound since the start of the financial crisis have resulted in expat pensioners losing thousands of pounds in income.  We look at ways you can protect yourself.

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, according to currency specialists HiFX.

The analysis of the top 13 countries where over one million British expat pensioners live and receive state pensions revealed 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, a difference of €145.20.

Mark Bodega, Director at HiFX, commented: "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. Pensioners have been struck hard by the on-going financial crisis, as well as importing and exporting volatility which has had a dramatic impact on exchange rates."

Analysis of these top 13 countries has indicated that 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 on-going 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 Francs against the pound to 1.41 Francs.

Mark Bodega added: "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.  For those in Europe, the days of €1.3 - €1.5 against sterling are now over, €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."

See how much you could save with HiFX: sign up and make a transfer

The highs and lows of sterling in 2007 and 2013 against key currencies and the difference to an average state pension:

HiFX data on state pension returns

Source: HiFX data examined state pension returns in South Africa, Australia, New Zealand, Germany, Ireland, Italy, Spain, Cyprus, Netherlands, France, Portugal, Switzerland and Canada)

Advice for British pensioners who are feeling the pinch

"With further sterling volatility predicted, pensioners who cannot afford to see the value of their pension income decrease any further should consider using one of the Regular Payments schemes offered by many currency specialists in the UK."

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 twelve 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.

Advice for pensioners who are feeling more bullish

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.

money transfers

HiFX customer reviews
Where the spooks get their coffee fix: The busiest Starbucks in the US is also the most secretive

The secret CIA Starbucks

The coffee shop is deep inside the agency's forested Virginia compound
Revealed: How the Establishment closed ranks over fallout from Loch Ness Monster 'sighting'

How the Establishment closed ranks over fallout from Nessie 'sighting'

The Natural History Museum's chief scientist was dismissed for declaring he had found the monster
One million Britons using food banks, according to Trussell Trust

One million Britons using food banks

Huge surge in number of families dependent on emergency food aid
Excavation at Italian cafe to fix rising damp unearths 2,500 years of history in 3,000 amazing objects

2,500 years of history in 3,000 amazing objects

Excavation at Italian cafe to fix rising damp unearths trove
The Hubble Space Telescope's amazing journey, 25 years on

The Hubble Space Telescope's amazing journey 25 years on

The space telescope was seen as a costly flop on its first release
Did Conservative peer Lord Ashcroft quit the House of Lords to become a non-dom?

Did Lord Ashcroft quit the House of Lords to become a non-dom?

A document seen by The Independent shows that a week after he resigned from the Lords he sold 350,000 shares in an American company - netting him $11.2m
Apple's ethnic emojis are being used to make racist comments on social media

Ethnic emojis used in racist comments

They were intended to promote harmony, but have achieved the opposite
Sir Kenneth Branagh interview: 'My bones are in the theatre'

Sir Kenneth Branagh: 'My bones are in the theatre'

The actor-turned-director’s new company will stage five plays from October – including works by Shakespeare and John Osborne
The sloth is now the face (and furry body) of three big advertising campaigns

The sloth is the face of three ad campaigns

Priya Elan discovers why slow and sleepy wins the race for brands in need of a new image
How to run a restaurant: As two newbies discovered, there's more to it than good food

How to run a restaurant

As two newbies discovered, there's more to it than good food
Record Store Day: Remembering an era when buying and selling discs were labours of love

Record Store Day: The vinyl countdown

For Lois Pryce, working in a record shop was a dream job - until the bean counters ruined it
Usher, Mary J Blige and Will.i.am to give free concert as part of the Global Poverty Project

Mary J Blige and Will.i.am to give free concert

The concert in Washington is part of the Global Citizen project, which aims to encourage young people to donate to charity
10 best tote bags

Accessorise with a stylish shopper this spring: 10 best tote bags

We find carriers with room for all your essentials (and a bit more)
Paul Scholes column: I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England

Paul Scholes column

I hear Manchester City are closing on Pep Guardiola for next summer – but I'd also love to see Jürgen Klopp managing in England
Jessica Ennis-Hill: 'I just want to give it my best shot'

Jessica Ennis-Hill: 'I just want to give it my best shot'

The heptathlete has gone from the toast of the nation to being a sleep-deprived mum - but she’s ready to compete again. She just doesn't know how well she'll do...