Expat British pensioners wasting £300m
Expat Investor, 1 May 2007
British citizens living abroad could be wasting over £300 million a year when claiming their state pensions, due to unnecessary bank charges and fluctuating exchange rates.
HIFX, the foreign exchange broker, reports that over one million pensioners are now living abroad and claiming their pensions from the UK. In September 1997, there were 770,000 retirees claiming their pensions abroad. In March 2003 this figure had grown to 932,000. The most recent figure stands at 1,038,600. However, each month that the average retiree living abroad claims his or her pension through their bank they are charged anything between £10 and £30. On top of this many overseas banks demand receiving charges averaging 0.5% of the total value of the monthly pension. This means in a typical year expat pensioners are paying over £300 in bank charges and fees just to be able to spend their government pension. And anyone holding a private or company pension in the UK who wants to receive an income from it whilst abroad has to pay the same charges for each payment received, eating into those hard earned savings yet again.
Furthermore, any pension payments retirees are being paid from the UK are subject to fluctuating exchange rates meaning the value of their pension can go up and down continually throughout the year. The 37,240 retirees living in South Africa are some of the most exposed as the South African Rand is one of the world's most volatile currencies. HIFX provides the following example. A retired couple claiming a state pension allowance of £730.16 a month from the UK would have received ZARI0,981 in October 2006 but only ZAR.9,779 in November of the same year. So although the amount being paid out in pounds remained the same, in just one month, the amount received was ZARI ,202 less. HIFX runs a regular payment service to enable British people who have emigrated or bought property abroad to manage their currency payments - such as pensions, salaries and mortgage transfers. HIFX reports that there is no charge to customers sending money overseas through their regular payments plan nor are there any receiving charges. This product also protects people against currency fluctuations, by fixing exchange rates for between six and 24 months.
Mark Bodega, marketing director says “with over a million retirees living abroad and claiming their state pensions from the UK, this equates to a lot of money being paid in fees and unnecessary bank charges and millions exposed to foreign currency fluctuations every month. HIFX's regular payment service means retirees no longer have to pay expensive bank charges when making regular payments overseas. The plan also means retirees know they will be receiving the same amount of income every month, which means they can budget and save themselves the worry of currency fluctuations eating into their pension." "Everything is done via direct debit which means the customer doesn't even have to speak to their foreign or UK bank, therefore saving again on high call rates. HIFX arranges everything on their behalf and gives retirees living abroad real peace of mind."
Top ten countries for British retirees
Country No of claimants
1. Australia 241,050
2.Canada 153,820
3. USA 128,430
4. Republic of Ireland 102,530
5. Spain 75,380
6. New Zealand 46,680
7. South Africa 37,240
8. France 34,580
9. Italy 33,240
10. Germany 31,910