Poor foreign exchange rates add to expat pension woes

Around half a million Britons who have retired abroad are facing serious shortfalls in their state pensions.

Brits who have retired to certain countries outside of the European Economic Area could be living off just £6 a week because current laws mean that the UK government does not need to make all pensions inflation-proof.

Unfortunately, efforts to change these laws were knocked back today (March 17th) as the European Court of Human Rights rejected an appeal to bring all pensions into line with inflation.

Poor currency exchange values on sterling have added to the decline in the worth of the payouts for people living in countries including Australia and Canada.

Michelle Mitchell, Age Concern and Help the Aged charity director, commented: "This ruling is bad news for half a million pensioners whose only fault is to retire to the 'wrong' country in the international postcode lottery of pensions up-rating.

"It's hugely unfair that people who have made their National Insurance contributions all their lives in the UK are being penalised for retiring abroad."

She added that an increase in-line with inflation would have eased things for those "hit by the recession and a weak pound".

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Posted by Chris Barber