By Daniel Hunter
British pensioners living overseas have potentially lost out on over £10.6 billion of their income since 2007 due to the falling strength of sterling, according to HiFX, the foreign exchange specialists.
The analysis of the top 13 countries where over one million British expat pensioners live and receive state pensions (see table one) revealed that an expat pensioner living in the Eurozone claiming state pension abroad could have seen their monthly pension income of £440.60 worth anywhere between €655.60 in April 2007 to €510.40 in April 2013, a difference of €145.20.
Mark Bodega, Director at currency specialists HiFX, commented: "The global economic downturn hasn't settled down in any way. Unfortunately, Brits living abroad and receiving a fixed income in sterling have been hit particularly hard, missing out on £8.9 billion since 2007, and could not have failed to notice that they are now receiving less and subsequently now have a big hole in their pension pots. Pensioners have been struck hard by the on-going financial crisis, as well as importing and exporting volatility which has had a dramatic impact on exchange rates."
Analysis of these top 13 countries has indicated that pensioners in South Africa are getting more for their money at ZAR13.70 against sterling, having fallen from just ZAR14.40 in April 2007. Pensioners in Europe fair the worst due to the on-going financial crisis hugely impacting exchange rates, they currently get €1.16 against the pound, falling from €1.49 in January 2007. Those in Switzerland have taken one of the biggest hits, going from 2.43 Francs against the pound to 1.41 Francs.
Mark Bodega, Director at currency specialists HiFX, added: "Pensioners in South Africa have seen the biggest return on their state pension, however, South Africa is notoriously very volatile, so they need to consider fixing for 12 months to avoid any drops in their state income. For those in Europe, the days of €1.3 - €1.5 against sterling are now over, €1.2 against sterling would now be seen as high. However, pensioners in Switzerland have not only taken the biggest hit in terms of their state income, Switzerland is also notoriously expensive and has high living costs, so pensioners hit will have been struck from both sides."