An alternative approach could be for expats to transfer their UK pension into the currency of the country in which they have retired to, or plan to retire to, thus eliminating exposure to foreign exchange fluctuations.
(PRWEB UK) 3 May 2013
UK expat retirees living on ‘insufficient’ pension income
- According to latest data, pension income is unable to support desired lifestyles for most retired UK expats
- Growing number of British expats believe that their money goes further abroad when compared to the UK
- Most UK expats who are still working realise they will have to cut spending substantially when they reach retirement
Older UK expats who are living abroad are facing a serious pension gap squeeze, according to the very latest research1 published by Lloyds TSB International. A survey of 1,168 expats living all over the world was conducted, and it was found that the number of retired expats who think their pension income is enough to sustain their desired lifestyle is just 30 per cent. What’s more, over half (52 per cent) of expats who are still in work realise that when they reach retirement age, they will have to cut their spending significantly in order to make ends meet.
Many retired expats are still planning to stay living abroad, despite the squeeze on pension incomes. According to 47 per cent of respondents, this is because they believe their pension income will go further if they continue living outside of the UK. The number of people who think that their financial situation will be better living in the UK is just 18 per cent, according to the research.
The high cost of living in the UK appears to be one of the key reasons for this way of thinking. Only 26 per cent of those included in the survey said that they would have lower living costs in the UK compared to their new country of residence.
Many retired UK expatriates are also worried about currency fluctuations, with 50 per cent of UK pension holders expressing concern that exchange rates may affect their pension income at some time. Back at the start financial crisis, when the Pound fell heavily against the Euro, many retired British people saw a dramatic drop in their UK pension incomes.
Commenting on the findings of the survey, the Associate Director at Lloyds TSB International, Emiko Caerlewy-Smith, said: “A growing pension gap is a real worry for many expats, some of whom will have to significantly scale back the lifestyle they have been used to. These worries have been particularly compounded for retired expats who draw a UK pension income, but spend in their local currency, as it means they are running a currency risk on perhaps all of their income.
“An alternative approach could be for expats to transfer their UK pension into the currency of the country in which they have retired to, or plan to retire to, thus eliminating exposure to foreign exchange fluctuations.
"Various international pension arrangements exist to serve the needs of British nationals working or retiring abroad. Your pension can be one of your greatest lifetime assets so we would always suggest customers seek professional financial advice in this area.”