British pension payments abroad fall due to currency fluctuation

British pensioners living in Europe have potentially lost out on more than €4 billion of their income in the last two years due to the falling strength of Sterling. If the Pound continues to fall to €1.15 Brits may see their pension income fall by a further €750 over the next year calculates HIFX, the currency exchange specialists. As well as wild currency fluctuations, pensioners are also exposing themselves to over £300 a year in bank charges just to transfer their income aboard.

An average couple's monthly pension income of £628 was worth anywhere between €766 and €816 during the month of October 2008 (depending on when they transferred their funds) due to volatility in the markets.

Mark Bodega, Director at currency specialists HiFX comments: "In the current economic slowdown everyone is feeling the pinch. However Brits living in Europe and receiving a fixed income in Sterling are being hit particularly hard.

"In the last month we have seen unprecedented volatility in the currency markets with the value of the Sterling fluctuating by over 6% against the Euro, the largest monthly range (in percentage terms) since May 2000.

"Any pensioners who have not set up a regular payments abroad system to transfer their pension income at a fixed exchange rate each month can not fail to have noticed that they are receiving less."

HIFX runs a regular payment service to enable British people who have emigrated or retired abroad to manage their currency payments 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 also eliminate all receiving charges.

HiFX has calculated that, each month that the average retiree living abroad claims their pension through their bank they are charged anything between £10 and £30. On top of this many overseas banks charge average receiving charges of 0.4% of the total value of the monthly pension. This means in a typical year pensioners living abroad are paying over £300 in bank charges and fees just to be able to spend their pension abroad.

Bodega, continues: "With over a million retirees living abroad and claiming their state pensions from the UK, this equates to millions being exposed to foreign currency fluctuations every month plus a lot of money being paid in transfer fees and unnecessary bank charges"