Boosting your spending power with a QROPS

British retirees living overseas are paying losing a fortune as currency fluctuations hit their pension payouts - when many could have avoided the problem by opening a QROPS.

The problem is every time pension payouts stop in a bank they incur charges - like transfer fees and currency exchange costs.

If the retirees had shifted their money in to a QROPS that can pay out in local currencies, they could save money.

Currency exchange firm HiFX reckon that pensioners living abroad drawing the state pension pay about £300 in bank charges and have lost 30% of their purchasing power in France, Spain and Italy against the Euro due to currency fluctuations.

This means their pension is worth £50 less now than in July.

The state pension is an example - but most many expats retiring to a place in the sun have private pensions as well and the same currency fluctuations and bank charges are devaluing their spending power too.

If you are considering retiring overseas, then take advice now from a UK regulated independent financial advisor with experience in QROPS - a short name for Qualifying Recognised Overseas Pension Schemes.

The advantage of a QROPS is funds can be invested in Euros, US Dollars and many other currencies and can be paid directly in to an offshore bank account,

That eliminates a lot of the fees that eat in to the pension payments and leaves the saver with more cash in their pockets than if the pension was left in the UK and had to pass through several financial hops to reach wherever they live - with each hop attracting a bank charge.

Little can be done to help save fees on the state pension if this is an important part of your monthly finances, as a state pension cannot be transferred in to a QROPS.

If it is not a vital part of your income and you regularly spend time in the UK visiting family and friends although your permanent home is now abroad, you could consider leaving the state pension cash in a UK bank account for spending when you come home.

Leaving the money in the UK if you don’t need it makes sense, as your pension will not incur charges moving between banks nor on currency exchange.