The weak pound has cut some expat pensioners’ income by a quarter since the financial crisis.
(PRWEB) April 13, 2011
- New research reveals great concern regarding reduced pensions income
- More than two thirds of expat pensioners worrying about fluctuations in currency
- Long-term weakness in Sterling results in trend for pensioners to shift bank accounts offshore
A survey conducted by Lloyds TSB International has found there is a growing concern among expat pensioners, with more than two thirds saying they are worried about their reduced pension income. There are around 1.1 million British pensioners living overseas at the moment that receive a pension in Sterling and many are being hit by low foreign exchange rates when transferring their cash over to the countries they now live in.
Since the financial crisis, the pound has suffered a fall of more than 20 per cent against the Euro – and continues to look weak against currencies across a large number of places that are popular with expats. According to the Lloyds TSB International research, expat pensioners who are less affluent are now very much concerned about movements in international currencies and how these might damage their finances. In fact, 89 per cent of respondents who have an income of £25,000 a year or less say they have concerns.
Commenting, Lloyds TSB International Managing Director Jakob Pfaudler said: “The weak pound has cut some expat pensioners’ income by a quarter since the financial crisis.” He added: “While many people can cope with a temporary fall in earnings, the pound has now been weak against the Euro, for example, for about three years so it is little wonder that many expat pensioners are worried about their continued loss of spending power.”
The study also showed there are significantly more expats retiring and moving their cash into offshore bank accounts – with 42 per cent of those polled saying this is a decision they had taken – in comparison to just 26 per cent six months ago.
Pfaudler believes this trend may well have been caused by the long-term weakness of Sterling, explaining: “The weak pound has been a problem for many expats for some time now so many of them have been looking for ways to protect the income they receive in Sterling. It then makes perfect sense that offshore accounts would rise in popularity because they dramatically reduce the charges and punitive exchange rates incurred when moving money between two countries.”
As well as more use of offshore bank accounts by expats, there has been a fall in the number of people saving their money in UK accounts. Between July 2010 and March 2011, this figure has dropped from 39 per cent to 23 per cent.
Jakob concluded: “In this uncertain economic environment, the flexibility offered by multi-currency offshore accounts through their competitive exchange rates and lack of transfer fees is a serious plus that expats should consider.”
Lloyds TSB International helps over 12,000 people set up a new international bank account each year. The bank provides financial guidance and a checklist to help people emigrate at: http://www.lloydstsb-offshore.com/international-current-accounts