1m UK pensioners abroad hit by currency swings

Tuesday, 04 November 2008 02:04

Over one million UK pensioners have seen the value of their pensions drop by up to 20 per cent over the last 21 months due to the collapse in the value of the pound.

Since September 2007 the value of sterling against the euro has dropped by 20 per cent - leaving those claiming a state pension from the eurozone receiving ?200 less a month.

Currency specialists HiFX estimates the value of the loss to UK pensioners aboard to be ?4.1 billion (£3.3 billion).

Currently £1 is worth ?1.24 - but if sterling falls to ?1.15 annual incomes could drop by ?753.60.

Mark Bodega, director at HiFX, said: "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 six per cent against the euro, the largest monthly range in percentage terms since May 2000."

He added any pensioner not setting up a regular payments abroad system to transfer their pension income at a fixed exchange rate each month will have noticed that they are receiving less.

Pensioners abroad are also being hit be the cost of transferring cash abroad - with overseas banks charging average receiving charges of 0.4 per cent and UK banks charging between £10 and £30.

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