With allowance made for currency fluctuations and 3% inflation in the Eurozone over this period, pensioners living in Europe with fixed GBP incomes, and paid in local currency, have lost out significantly compared to those in the UK.
Equiniti supports around nine million pension scheme members, 6,000 of which are expat pensioners living in Europe who will have been exposed to this diminishment in the purchasing power, but the problem spans far wider. The ONS estimates1 there are more than 207,000 British citizens aged over 65 residing in the EU who may be experiencing similar issues.
However, expat pensioners elsewhere in the world have also suffered from these exchange rate woes since 2015, with those in the US suffering a similar loss in purchasing power to those in Europe. Only South Africa has seen expat pensioners’ income rise (3%) as a result of exchange rate movements.
|
Currency |
Purchasing Power of a £5,000 pension @ 7 May 2015 |
Purchasing Power of a £5,000 pension @ 17 May 2019 |
% change |
||
|
Exchange Rate |
Value (£) |
Exchange Rate |
Value (£) |
||
|
Eurozone Euro |
1.35 |
6,750 |
1.17 |
5,831 |
-14% |
|
Australian Dollar |
1.92 |
9,600 |
1.86 |
9,309 |
-3% |
|
US Dollar |
1.52 |
7,600 |
1.30 |
6,524 |
-14% |
|
Canadian Dollar |
1.85 |
9,250 |
1.76 |
8,791 |
-5% |
|
New Zealand Dollar |
2.04 |
10,200 |
1.98 |
9,893 |
-3% |
|
South African Rand |
18.30 |
91,500 |
18.85 |
94,273 |
3% |
|
Swiss Franc |
1.40 |
7,000 |
1.33 |
6,669 |
-5% |
Andy Brown, Director, Payment Services at EQGlobal, Equiniti, commented:
“Expat pensioners are always at the mercy of the currency exchange rollercoaster, but after a period of considerable uncertainty they will be facing a significant increase in the cost of living.
“Our advice to anyone thinking about retiring abroad is to understand the implications of currency exchange rate movements and also 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.”
ENDS
For more information:
Temple Bar Advisory
William Barker / Sam Livingstone
Tel: 078 2796 0151 / 077 6965 5437
Email: williamb@templebaradvisory.com / saml@templebaradvisory.com
Notes to Editor:
Research
1 - Number of British citizens resident in EU countries, by age group and sex
About Equiniti
Equiniti Group plc, an international technology-led services and payments specialist, provides non-discretionary payment and administration services to some of the world’s best-known brands and UK’s largest public-sector organisations.
It is the UK’s leading provider of share registration, employee share plans, and associated investor services, and also has market-leading positions in pension administration and software, and employee benefit schemes.
Equiniti’s services, which are delivered by over 5,000 employees, benefit 36 million people in the UK, US and 120 other countries around the world.