Cost Of Living For UK Expat Pensioners In EU Rises Twice As Fast As In UK - Equiniti

Cost Of Living For UK Expat Pensioners In EU Rises Twice As Fast As In UK

20 May 2019

New data from Equiniti, the international technology-led services and payments specialist that manages the payments of over 60,000 UK expat pensioners, finds that those who retired to Europe have seen their cost of living increase by 14% since May 2015 – almost double the rate of inflation in the UK (c7%).

On the date of the general election, 7 May 2015, the referendum of leaving the EU was guaranteed. Since then, the intervening period has seen volatility in global currency markets largely due to the implications of the UK’s exit from the EU (Brexit) and wider global events; such as the trade war between the US and China.

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
2015 - 2019

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.

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