Weak Pound means British expats are living on less
According to Equiniti, one of the UK’s largest pension administrators, the rapid decline of the Pound over the past few months has led to retired British expats having dramatically reduced spending power compared with ten years ago and many have reported that they are struggling to make ends meet.
Equiniti produced a league table of those worst affected by the Pounds decline in the most popular expat destinations. According to the report, retired expats living in New Zealand now have 38% less spending power than when they first retired. In Australia that figure is even worse as the Australian Dollar continues to strengthen.
Ten years ago a typical British pension would have brought the recipient around NZD$14,577 whereas today it only generates NZD$8968. Those living in Austrlia have seen their pension incomes decline by as much as 47%.
The largest proportion of expat pensioners lives in the Eurozone and there too they have suffered from weakening spending power. Someone who retired in 2003 with a £5000 pension would bring in just under €7,300 ten years ago, while the same would now only buy €5,692.
In comparison expat pensioners living in South Africa and Jamaica were the only ones to have seen an increase in the buying power of their pensions. The South African Rand has plummeted in value in recent months after mining strikes and worker unrest led to investors looking for more stable economies to invest in.
Keith Boughton, director of Equiniti Paymaster, said; “Ten years ago the value of sterling was significantly higher than it is today, and those emigrating abroad for their retirement enjoyed considerable value from their pension. A plummeting pound has left many expat pensioners unable to make ends meet and struggling to find other ways to protect the value of their pensions.”
The reason for the Sterling’s decline can be traced back to the Bank of England’s policy of ultra low interest rates and quantitative easing measures, both of which have weighed heavily upon the Pound.
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