UK retirees hit hard by the pound's fall in value

Sterling's fall in value has caused serious problems for people who spend part of their time abroad, own property abroad, or who need to send to transfer money regularly overseas. Worth just €1.08 on Friday, the lowest level in five months, Sterling has devalued 26% since August 2007.

Despite Mervyn King's assurances that a weak pound is good news, UK pensioners who have moved overseas would tend to disagree. Many clients at Caxton FX are pensioners transferring their state pensions abroad. Since the pound imploded, their income is down, in some cases, as much as 40%.

Duncan Higgins, Senior Analyst at Caxton FX says, "The idea of retiring abroad has become an unsustainable dream for some retirees. Pensioners cannot afford to support their lifestyles overseas with such weak exchange rates. For UK retirees transferring their pensions to Euro bank accounts, or Brits paying their overseas mortgages, the euro price is likely to remain high through 2009. Overall downward pressure remains strong, and an imminent sterling recovery remains improbable, with the pound likely to edge down, over the short term."

However - there are ways to maximise on the weak pound. Particularly if you're sending any amount between £100 and £10,000, as a one-off or regular payment, the cheapest option is to use a currency broker.

Caxton FX remains the only currency broker, in an unregulated industry, to be regulated and authorised by the FSA.

Caxton FX's Fastpay system offers international money transfers on smaller amounts, with no transfer fees, no commission and bank-beating exchange rates. Research done by Caxton FX has found that using Fastpay over a traditional high street bank could save a pensioner £624 per year, in transfer fees and commission costs.

It is really important to de-mystify currency brokers. They make their money in exactly the same way the banks do - through a spread on the interbank rate. The difference is that they take a much smaller spread, usually keeping within one percentage point - and they don't charge commission or transfer fees either. A typical high street bank will take around a 5-7 per cent spread and charge commission and transfer fees on top.

For more details, please visit caxtonfx.com/onlinepayments