Scottish pensioners face charges

Mon 10 Mar 2014

116,000 Scottish pensioners could face £36 annual charge and double digit FX volatility if Scotland adopts the Euro.

Equiniti Paymaster, one of the UK’s largest pension administrators, has warned that 116,000 Scottish pensioners could be faced with an (estimated) £36 annual charge for currency conversion if Scotland were to adopt the Euro. Even worse, could be the effects of double digit foreign exchange (FX) volatility.

Equiniti Paymaster currently provides overseas local currency payments for over 50,000 pensioners. Since moving to the Eurozone in 2004, the majority of those receiving their UK pensions in Euros have seen the local purchasing power of their pensions fall by 23%.

Changing a pensioner’s payment currency need not be expensive. Equiniti Paymaster suggests that most pension schemes would be able to do so for £3 per transaction.

Andy Brown, Operations Director, Equiniti Paymaster International Payments, says; “Depending on where the pensioner has retired to and the international pension transfer mechanism in use by their schemes, the cost of wire services can add as much as £20 per month in charges. If Scotland were forced to adopt the Euro then schemes should not expect to pay more than £3 per pension payment for the currency conversion, though this could be a lot more if they used a currency converter that charged a premium.”