Expats Hit by Weak Pound

According to figures published by foreign exchange specialists HiFX British pensioners now living abroad have not escaped the effects of the recession. According to their data the average pension income for Brits living in Europe has fallen by around £250 since January 2007.

There are more than one million Britons currently living abroad and claiming state pensions. HiFX claim that the effects of a weak pound have led to more than £5million being potentially lost on their income in the last two years.

Those who retired to Commonwealth countries such as Australia, New Zealand and South Africa have seemingly suffered the worst. Expats who retired to eurozone countries such as Spain have done marginally better.

Britons living down under in Australia have lost more than AUS $150 in the past three months (around £85) based on a typical state pension of £628, while pensioners in New Zealand, have seen their income cut by around NZ $226 (approximately £103). Retirees living in Europe and the United States have also been hit, with a reduction of approximately £56 and £34 respectively in the past four months.

Mark Bodega, director at HiFX, said: "In the current economic slowdown everyone is feeling the pinch. However Brits living in Europe and receiving a fixed income in Sterling are being hit particularly hard. In the last two years we have seen unprecedented volatility in the currency markets with the value of the Sterling fluctuating by over 30 per cent against the Euro."

In addition to a weakening pound affecting pension incomes it was also estimated that the average pension living abroad spends up to £300 a year in bank charges.