Retirees Escape Oversees Value Pound Rises
Wednesday, 06 October 2010
In a recent survey of 60 to 65 year old Brits, Currency UK has found that more than 43 per cent are considering a move overseas as Government spending cuts and tax hikes hit confidence.
Of those wanting to flee Britain, a quarter stated they would make the move permanently, with the others seeking a holiday home or expressing a desire to travel.
The reasons given for leaving the UK's shores when retiring included:
32% - cost (cheaper to live abroad)
26% - feel that Britain has little to offer a retiree
19% - for better weather
8% - seeking a better standard of living
8% - to be neared to family
4% - to travel
3% - other
Adrian Jacob from foreign exchange broker, Currency UK, explains: "We questioned those reaching retirement age to ascertain their views on their golden years. Many were keen to invest in a holiday home in the sun, but for others it was a case of escaping Britain for good.
"There was a preconception that it would be cheaper to live abroad than in the UK, but the pound has been weak in recent years and many retirees have been forced to move back - particularly from France and Spain.
"As the pound has now started to rally, and predictions of soaring interest rates in coming years hit the press, there can be no better time to put things in place. However, it is essential you plan your finances to ensure you make the move in the most cost effective way in terms of transferring savings, buying property overseas and transferring monthly pension income to ensure you have plenty of cash to sip sangria in the sun."
In the wake of a strong second quarter of GDP data and a commitment by the new coalition Government to cut the budget deficit, sterling has rapidly strengthened climbing 7% against the dollar since May.
Currency UK advises that with this strengthening of the pound, now is one of the best times in recent months to make the decision to retire abroad. The company provides the following tips to retiring overseas:
When buying property overseas it is common to pay using the local currency and exchange issues can create huge costs. Before deciding on your new house, it is important to be fully aware of the costs involved and the legal processes you will need to undertake. Searching for the best exchange rate possible will ensure you get more for your money and pay less for your dream home.
2. If you are thinking of transferring savings overseas it may be worth considering leaving money in the UK and choosing a forward contract which will guarantee a set rate at a future date, protecting you from market fluctuations. Spot contracts are also an option if you need the currency immediately or wish to take advantage of a beneficial rate. With the value of the pound rapidly rising you will get much more for your money now than you would have 6 months ago, making it the perfect time to exchange your sterling for Euros. FSA regulated, Currency UK offers a bespoke exchange service including foreign bank account set-up to save you both time and money.
3. As long as you have paid enough National Insurance contributions over the years, you will receive a UK State Pension no matter which country you chose to retire to. However the country you move to can have an impact on the level of this pension as in certain countries, such as Australia and Canada, your pension may not increase in line with the rising costs of living. To receive an index-linked pension you will need to move to countries where the UK has social security deals such as the European Union, the US, Jersey and Barbados.
4. When transferring your pensions to your new country of residence, there are many payment options available such as both fixed rates or variable rates regular payment schemes. This process can be both complicated and costly so ensure you compare the market to get the best deals. Contact your bank but ensure you also go to an FSA regulated foreign exchange specialist such as Currency UK, which unlike the majority of the high banks, can provide you with a foreign account and undertake your currency transactions at no fee - usually saving between 1 and 3 per cent when compare to a bank.
5. Consider what level of security you need and the risk you are prepared to take in terms of your pension. If you need it to make mortgage payments it is worth setting up a 12 or 24 month deal to ensure you know in advance exactly what exchange rate you need. If you are able to take more risk, a spot contract will keep your pension in sterling only transferring it when the exchange rate reaches your pre-agreed desirable rate.
Adrian concludes: "In the last year we have seen a five-fold increase in the number of expat customers transfer currency sterling out of the country, mostly into non-euro currencies such as Australian, Canadian or US dollars. However, a recent trend over the last three months has been retirees seeking to move to Spain and France, making the most of reduced property prices."
Currency UK offers a bespoke service where you will be assigned a personal accounts manager who will take all the hassle out of international payment and search for the best exchange rates available, so you will get more money in your pocket and pay less for your new life.
Notes to Editors
Regulated by the FSA, Currency UK is one of the UK's leading foreign exchange brokers, ensuring individuals and companies can access the best rate for currency transfers across FX markets.
A major participant on the foreign exchange market, Currency UK regularly offers the most competitive rate on currency exchange and has moved millions of pounds around the globe for its clients.
Currency UK is a member of the Association of International Property Professionals (AIPP) and is the preferred foreign exchange partner of the Offshore Financial Trade Association (0FTA).