Expat pensions take a pounding from money markets
Expats are losing hundreds of pounds a year each by failing to keep up with currency markets and drawing their pensions in Sterling, according to a new survey.
About 20% of expats claim a Sterling pension and are suffering a drop in buying power due to the weakening of the Pound against the Euro, says a survey by Moneycorp, a currency exchange company.
More than one-in-four Brits living in Spain (28%) and over a third in Germany (33%) rely on their pensions as a core source of income.
Expats rely on pensions as key income source
Yet the research reveals that nearly a quarter (22%) do not monitor the currency markets to avoid losing out money when making overseas payments.
The currency exchange problem also affects many expats living in the US and Canada. Those in other favourite destinations like Australia and New Zealand are currently finding life easier as the Pound is steadier against the Australian and New Zealand dollars.
David Kerns, Head of Private Clients at Moneycorp said: “Our research findings are not surprising as a high number of Brits living overseas rely on their pension as a key source of income, as well as sterling income from house lettings in the UK and their savings.”
QROPS pension switch solution
Many of these expats and international workers could wipe out the problem by switching their personal pensions paid in Sterling to an offshore pension called a QROPS that can pay out gross pension benefits in any major currency.
Pensioners receiving a UK State pension or annuity do not have the QROPS option, but the solution is available to most others paying in to a pension or with cash ready to buy in to annuity.
The poll shows many expats are ready to give up their life abroad to gain more from their pension - but with a QROPS they can have the best of both worlds - a pension hedged against currency fluctuation and they can stay in their home overseas.
A QROPS also has many tax advantages and investment flexibility for as a pension for international workers.
