Stop the Value of Your Pension from Decreasing!
Many expats abroad unknowingly lose money when receiving their monthly pension payment. Often a pension is paid in sterling at a UK (or off-shore) bank, exchanged into the local currency required, and then sent to the pension holder’s overseas bank account. Alternatively, pensions are paid into a Sterling account in their overseas bank account, and then exchanged into local currency.
By using the standard banking system, money saving options are often overlooked, unnecessary charges can be made and poor currency conversion rates applied. Charles Purdy states "On average, a pension holder loses around £30-£50 unnecessarily on every transfer – this amounts to actually giving away £600 a year – and in some cases, much more!" So what is the solution? It’s simple – use an international payment specialist, not a bank.
The money saving option – fix the currency exchange rate
Charles comments, "Take Mr Benson, who retired to Cyprus at the end of 2007. He needed to receive his Sterling pension in Euros. In January 2008, he explained that his monthly pension amounted to £1,134 and wanted to know which options were available. After a brief conversation, he decided to set up a regular payment with a fixed exchange rate of 1.33 for the next 24 months until the end of 2009. In January, he received €1,508.22 in his Cyprus bank account and will continue to do so every month until December 2009".
If Mr Benson had decided against fixing a currency exchange rate, his monthly amount would have decreased along with the weakening sterling rate – and by December 2008, his monthly transfer would have fallen to €1,190.70 – a 21% drop in value!
Charles continues, "Mr Benson, like many other expats, assumed he was getting the best possible deal from his bank – but sadly, banks often fail to offer or even mention the option of fixing a currency exchange rate for use in the future. They tend to offer customers lower exchange rates and usually charge commission and transfer fees, all of which can be reduced, if not eliminated altogether. There is absolutely no point paying fees you don’t have to, particularly in the current economic climate where every penny counts! And no matter where you are in the world, with the loss in value of sterling over the last 18 months, this scenario can apply".
Get good exchange rates
International payment specialists offer exchange rates that are guaranteed to beat the rates provided by the bank. Banks often set their buying and selling rates for currency first thing in the morning – when you visit a branch, you’ll see them hanging on the wall. Specialists, however, don’t set the rates in advance but call into the market floor to obtain the best rate possible at the time of the transaction.
Charles states, "For many expats, wherever they are in the world, watching the value of their Sterling pension depreciate over the last year must have been soul-destroying. When €1,508 is expected in the bank and only €1,190 arrives, the recipient clearly suffers great anxiety". Charles Purdy’s final comment is "Always remember, a short phone call could save you up to £600 a year!"
Charles Purdy is a Director at Smart Currency Exchange Limited – the only international payment specialists in the UK who work specifically to help people save money on regular transactions such as mortgage or pension payments. What’s more, we are the only international payment specialists in the UK where traders are NOT paid on commission – ensuring you get the best exchange rates every time!
So, to move money overseas, including funds for property purchases and also the repatriation of funds back to the UK, why not go to www.SmartCurrencyExchange.com for further information, or if you prefer, just telephone us locally (00 357) 26030213. And, to obtain your FREE pension report, simply go to www.UKPensionReport.com – it contains really useful information you may not know about!