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Expats Hit by Weak Pound
18.05.2011

Guardian Wealth Management’s group chief executive, David Howell, has recently expressed his concern that the British pound’s weak position could have an ongoing detrimental effect on retirees living abroad.

Retired Brits living as expats in other countries are feeling the pinch of the pound’s decreasing value in relation to other currencies; for those receiving their pensions in GBP sterling, it may be time to consider alternative pension options. With the pound decreasing in value by around 20% during the course of the last few years, expat retirees will be hit by a comparative reduction in their pensions when they convert their pension funds, into the currency of their new country of residence.

For the estimated million or so British expats who have retired abroad, Howell doesn’t envisage any improvement in the situation any time in the near future. This is due to the fact that interest rates in the Eurozone are being inflated, while the Bank of England are attempting to assist growth in the economy by holding interest rates at record low levels – this leaves the Pound at a weaker position in relation to the Euro, which is bad news for expat pensioners.

QROPS – A Potential Alternative for Expats

In an attempt to counter this bad news, Howell suggests that British expat pensioners could opt for pension investments made in the currency of their place of residence to lessen the impact of the weak pound. Another option for retirees with a pension pot in excess of £25,000 could be the transfer of their pensions into a QROPS (Qualifying Recognised Overseas Pension Scheme) – this means that pension funds can be drawn in the local currency and could also see these retirees being able to benefit from avoiding bank charges for the transfer of funds into overseas accounts. QROPS can also offer great tax benefits, another bonus for those who choose to transfer their pensions.

If you’re a British expat living your retirement overseas and you’re concerned about the current exchange rates and the Pound’s weakness compared to the Euro and other currencies, take a look at Guardian Wealth Management’s QROPS advice, or contact our financial advisors for impartial advice and financial planning support.


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