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Money transfer company hopes to help expats save on bank fees
| Published: | 25 Aug at 9 AM |
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A new company set up by one of the founders of Skype is looking to help British expats save money when transferring their pensions abroad. TransferWise has called the fees charged by banks for monthly international pension transfers “little short of criminal”, and claims they can undercut high street institutions and give expat Brits substantial savings.
According to research carried out by the company, UK banks are currently earning around £419 million every month from the 1.1 million British retirees who transfer their pensions to the countries in which they are living. Depending on how much is transferred at a time, the cut can be as much as 15 or 20 per cent, TransferWise claims.
According to the company, 3.5 per cent is typically taken on a transfer of £10,000, but this quickly rises to as much as 20 per cent for a transfer of just £100. TransferWise also claims that customers are usually unaware of these charges as they are hidden in bad exchange rates.
Taavet Hinrikus, who was involved in the launch of telecommunications revelation Skype, said UK banks have been taking advantage of British pensioners for years. He added that rather than using modern technology to give customers a better service, they are using it to their own advantage and generating millions for themselves.
Hinirkus, and his partner Kisto Käärmann, hope to change the way the international banking system works, much as the telecommunications world was changed by Skype. The two came up with the idea last year when trying to find a way to save on fees when transferring money from the UK to their native Estonia.
According to research carried out by the company, UK banks are currently earning around £419 million every month from the 1.1 million British retirees who transfer their pensions to the countries in which they are living. Depending on how much is transferred at a time, the cut can be as much as 15 or 20 per cent, TransferWise claims.
According to the company, 3.5 per cent is typically taken on a transfer of £10,000, but this quickly rises to as much as 20 per cent for a transfer of just £100. TransferWise also claims that customers are usually unaware of these charges as they are hidden in bad exchange rates.
Taavet Hinrikus, who was involved in the launch of telecommunications revelation Skype, said UK banks have been taking advantage of British pensioners for years. He added that rather than using modern technology to give customers a better service, they are using it to their own advantage and generating millions for themselves.
Hinirkus, and his partner Kisto Käärmann, hope to change the way the international banking system works, much as the telecommunications world was changed by Skype. The two came up with the idea last year when trying to find a way to save on fees when transferring money from the UK to their native Estonia.
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