Expat retirees in Canada hit hardest by decline in sterling

Published:  12 Nov at 6 PM
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Currency fluctuations since the 2008 financial crisis have hit British expats all over the world, but retirees in Canada have been the worst sufferers from the falling pound sterling.

Taking the UK state pension as it was in April 2007 as a benchmark, foreign exchange expert have calculated the losses to British pensioners in a number of worldwide destinations. At that point in time, sterling was strong against a range of currencies, and bought 2.29 Canadian dollars.

Six years later, the exchange rate has fallen to 1.65 CA$ to the pound, a devastating drop in the average monthly pension of £431.67. Canada is holding its place as the second most desirable retirement destination for UK pensioners, but is also a country where UK pensions are frozen from the minute the recipient leaves the home country.

UK expat retirees living in Australia have a slightly better deal, with the average state pension monthly amount down by £204.90, but Australia has no reciprocal agreement with the UK, meaning that pensions are frozen there as well. Although UK pensions remitted to retirees in the USA are not frozen, the weaker pound has wiped £123.81 from the monthly total.

Pensioners in Spain and France have lost some £120.26 due to sterling’s fall against the euro, although EU law ensures that the UK’s annual pension increases are paid. The calculations were based on a full UK state retirement pension, although many retirees living abroad draw less than the full amount due to not having made the required number of contributions.

Given that Britain’s economy is still struggling to recover, it makes sense for expat pensioner to shop around for the best exchange rates with the lowest charges. Forex providers report that more people are opting for fixed rate transactions set in advance in order to guarantee a set income per month.
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