British pensioners feeling the pinch home and abroad

As the effect of Sterling on the UK economy is debated, it's not just Brits living at home who are feeling the ongoing effects of a weak pound. British pensioners living in Europe have potentially lost out on almost €5.5 billion of their income in the last two years due to the falling strength of Sterling according to HIFX, the foreign 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 abroad.

Worst hit are pensioners in South Africa, New Zealand and Australia who've seen the domestic value of their British State Pension in their new country of residence slashed by market volatility.

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 2 years we have seen unprecedented volatility in the currency markets with the value of the Sterling fluctuating by over 30% against the Euro."

Against this background, it's no surprise that a group of 13 pensioners who have moved abroad want their UK state pensions to be inflation proofed and have taken their case to the European Court of Human Rights. The UK Department of Work and Pensions argues however that the government's priority is to help the least well-off pensioners living in the UK.

Advice for pensioners who are feeling the pinch:

"With further falls in the value of sterling predicted, any pensioners who cannot afford to see the value of their pension incomes decrease any further should consider using one of the Regular Payments Abroad services offered by many currency specialists in the UK."

HiFX for example, runs a regular payment service to enable British people who have emigrated or retired abroad to manage their currency payments via direct debit 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.

Those who are uneasy about fixing the exchange rate for up to 12 months and are more bullish about Sterling's future should at the very least shop around for better exchange rates and compare the rates offered by their high street bank with a currency specialist particularly one which offers an online service for smaller amounts of money.