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Spending Power Decreases for Expat Pensioners
| Published: | 18 Mar at 6 PM |
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Tagged: Foreign Exchange, Australia, New Zealand, Canada, Thailand, Switzerland, Euro, Exchange Rates, Pension Transfer
According to a recent survey, two thirds of pensioners are now less financially well off compared to ten years ago.
Equiniti, a pension payments firm, have looked into how pensions being paid in Sterling compare to other currencies.
With the majority of the firm’s 60,000 clients living in the Eurozone, this is bad news although the growing pound enables people to enjoy a higher exchange rate in other countries.
Over the past year, the pound has increased 10 per cent in value against the euro, yet the pensioners are worse off than they were 10 years ago at which time a £5,000 pension was worth 7,000 euros compared to today’s 6,548 euros.
According to Director Andy Brown, expat pensioners should consider how volatility in foreign exchange rates could affect income. Spending power in countries such as New Zealand, Canada, Australia and the United States has decreased due to local currencies performing better against the pound.
Expat pensioners face more financial hardship in countries such as Thailand, the Philippines and Switzerland due to their respective currencies rising in value.
One method to avoid the fluctuations in exchange rate affecting their pensions is to switch to a Qualifying Recognised Overseas Pension Scheme (QROPS). Many of these QROPS use a range of local currencies to pay benefits. Although this would resolve the issue of fluctuating exchange rates, pensioners could face difficulties trying to change their cash back into Sterling.
Equiniti, a pension payments firm, have looked into how pensions being paid in Sterling compare to other currencies.
With the majority of the firm’s 60,000 clients living in the Eurozone, this is bad news although the growing pound enables people to enjoy a higher exchange rate in other countries.
Over the past year, the pound has increased 10 per cent in value against the euro, yet the pensioners are worse off than they were 10 years ago at which time a £5,000 pension was worth 7,000 euros compared to today’s 6,548 euros.
According to Director Andy Brown, expat pensioners should consider how volatility in foreign exchange rates could affect income. Spending power in countries such as New Zealand, Canada, Australia and the United States has decreased due to local currencies performing better against the pound.
Expat pensioners face more financial hardship in countries such as Thailand, the Philippines and Switzerland due to their respective currencies rising in value.
One method to avoid the fluctuations in exchange rate affecting their pensions is to switch to a Qualifying Recognised Overseas Pension Scheme (QROPS). Many of these QROPS use a range of local currencies to pay benefits. Although this would resolve the issue of fluctuating exchange rates, pensioners could face difficulties trying to change their cash back into Sterling.
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