o Over 1,000,000 Brits live abroad and claim state pension
o Average pensioner abroad also wastes £300 a year in bank charges
o Tips for expat pensioners from currency experts HiFX

A test case being heard by the European Court of Human Rights has today ruled that the UK’s refusal to update pension payments in line with inflation to British expats living in 150 countries, including Canada and Australia, can continue.

Half of Britain’s 1.1 million British pensioners currently living overseas who have already seen the value of their pensions plummet as Sterling has weakened are affected.

Mark Bodega, Director at currency broker HiFX comments “The cost of living for expats receiving a fixed income in sterling has already shot up in the last few years as sterling has depreciated. So this ruling that their income will not rise in line with inflation as it does for pensioners in the UK is a double blow for hundreds of thousands of pensioners who are already struggling”.
The ruling marks the end of years of legal wranglings and is unlikely to be overruled. The current rules mean that a pensioner who paid National Insurance contributions throughout their working life but moved to overseas and took a pension from 1995 still only gets £59.20 per week, compared to the current basic state pension allowance of £95.25 per week.

Bodega continues “Any pensioners living abroad who want to get the most out of their pension payments and cannot afford to see the value of their pension income decrease any further through currency fluctuation should consider using one of the Regular Payments Abroad services offered by many currency specialists in the UK.”

In just the last 2 years, retired British couples all over the world have seen their monthly pension incomes hit by Sterling’s depreciation. Worst hit are pensioners in South Africa, New Zealand and Australia who’ve seen the domestic value of their State Pension in their new countries of residence slashed by market volatility. The table below shows the highs and lows of Sterling against each currency and the difference this would have on the average state pension of £823.55 for a couple.

Advice for Brits who are feeling the pinch:
With further falls in the value of sterling predicted if the general election leads to a hung parliament, any British pensioners living overseas who cannot afford to see the value of sterling decrease any further should consider the following services offered by many currency specialists in the UK.

HIFX runs a regular payment service to enable British people who have emigrated or retired abroad to manage their currency payments via direct debit and protect themselves against currency fluctuation by fixing exchange rates for between six and twelve months. HIFX do not charge their customers to send money overseas through their regular payments plan and also eliminate all receiving charges.

HiFX has calculated that, each month that the average retiree living abroad claims their pension through their bank they are charged anything between £10 and £30. On top of this many overseas banks charge average receiving charges of 0.4% of the total value of the monthly pension. This means in a typical year pensioners living abroad are paying over £300 in bank charges and fees just to be able to spend their pension abroad.

Those who are uneasy about fixing the exchange rate for up to 12 months and are more bullish about Sterling’s future should at the very least shop around for better exchange rates and compare the rates offered by their high street bank with a currency specialist particularly one which offers an online service for smaller amounts of money.

HiFX, for example, has an innovative Online International Money Transfer service (www.hifx.co.uk). The service allows customers to quickly and securely transfer amounts of £250 – £50,000 at rates which beat both the high street banks and other international money transfer specialists such as PayPal and Western Union. The service is the first to show real time, moving exchange rates. Customers can watch the live rate and choose when to make the transfer themselves and unlike other online transfer methods, there are no hidden charges. The new HiFX Online International Money Transfer service offers on average savings of 3% of the amount transferred when compared to high street banks and other international transfer providers.