Falling pound hits retired expats hard
Published: 30 September 2009 By MoneyHighStreet Staff Leave a Comment
With the pound falling against the Euro, cash strapped expats are struggling as their buying power is reduced. A currency card may reduce some of the costs, however.
Sterling has fallen 26% against the Euro since August 2007. This means that prices in Europe are now 26% more expensive for Brits.
Whilst this makes holidaying in Europe much more expensive, it is retired people who have moved to places like Spain who are suffering from the devalauation of the pound the most.
Pensioners living abroad earn receive their state pensions in Sterling so as the pound weakens, their pensions buy less and less.
Currency brokers such as Caxton FX with their prepaid currency card can help, in part, by transferring Sterling to expats without transfer fees and commission charges.
Research done by Caxton FX has found that using their Fastpay system instead of a traditional high street bank could save a pensioner £624 per year, in transfer fees and commission costs.
According to moneysupermarket.com there is a big difference in the cost of obtaining €1,000 if you opt for a prepaid currency card rather than simply use foreign currency or Travellers cheques.
Using a CaxtonFX prepaid card – €1,000 would cost £899.36
Getting Foreign currency or Travellers cheques from Travelex Online – €1,000 would cost £939.09
Acknowledging the difficulties facing retired expats, Duncan Higgins, Senior Analyst at Caxton FX said, “The idea of retiring abroad has become an unsustainable dream for some retirees. Pensioners cannot afford to support their lifestyles overseas with such weak exchange rates.”
“For UK retirees transferring their pensions to Euro bank accounts, or Brits paying their overseas mortgages, the Euro price is likely to remain high through 2009. Overall downward pressure remains strong, and an imminent sterling recovery remains improbable, with the pound likely to edge down, over the short term.”
Find out more about prepaid currency cards with our article ‘Currency cards – are they the best option for travel money?‘