Expats have seen a decline in their pension income over the past decade, and it looks like the trend is set to continue. Will Brexit make things worse for retirees living in the Eurozone?
Pension income for expats has fallen by 11% since 2005, according to new research.
Equiniti Group, which manages the payment of over 60,000 pensions to expats, has found that income has been falling steadily over the last decade.
The largest number of expat pensioners are in the Eurozone, where market uncertainty and the threat of Brexit have led to the value of their pensions falling by over 4% in the last year alone. Since the referendum on the UK’s position in the European Union was announced, the Euro exchange rate has fallen by 2%, affecting pension payments even further.
With the vast majority of expat pensioners choosing to retire in Europe, a Brexit could have a huge impact on their retirement.
It isn’t just expats living in Europe who are suffering though. Pensioners living in North America, New Zealand, Australia and Canada are worse off than they were a decade ago. Only those in South Africa and Jamaica have seen their income rise. The table beloe covers the purchasing power of a £5,000 pension.
|
Currency |
Feb 2005 |
Feb 2015 |
Feb 2016 |
% change 2005 to 2016 |
|
Eurozone Euro |
7,030 |
6,551 |
6,288 |
-11% |
|
Australian Dollar |
11,685 |
9,597 |
9,638 |
-18% |
|
US Dollar |
9,164 |
7,456 |
6,933 |
-24% |
|
Canadian Dollar |
11,345 |
9,357 |
9,520 |
-16% |
|
New Zealand Dollar |
12,800 |
10,181 |
10,398 |
-19% |
|
South African Rand |
54,885 |
85,387 |
106,100 |
+93% |
|
Thai Baht |
352,096 |
242,283 |
247,800 |
-30% |
|
Swiss Franc |
10,909 |
6,879 |
6,916 |
-37% |
|
Jamaican Dollar |
564,458 |
852,837 |
835,050 |
+48% |
|
Philippines Peso |
501,525 |
326,833 |
329,400 |
-34% |
Source: Equiniti
“Expat pensioners are always at the behest of the currency exchange rollercoaster, but after a period of the pound strengthening, the retirement income that they received has dipped again for most,” said Andy Brown, managing director at Equiniti International Payments.
Think before you leave
If you are considering retiring abroad make sure you do your research before taking the plunge:
“Our advice to anyone thinking about retiring abroad is to understand the implications of currency exchange rate movements,” said Brown.
“Look at the numerous ways in which to receive international payments as the ‘headline’ exchange rate is not necessarily an indication of the total cost of the transaction.”
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