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British expats vow to stay abroad despite squeeze on incomes

Here’s another article I did for Thisismoney.co.uk during my time with them. It was a really interesting piece, even though it came from a press release because I had no idea the squeeze on incomes was so tight on our expats. As you ca nsee from the comments links at the botton, it cause a wee bit of a debate, or at least more of a debate than anything I’ve written before has. Made me think about escaping the UK myself.

Thanks to Thisismoney.co.uk for letting me reprint it.

British expats are feeling the financial squeeze

Worth it: More than half of British expats will continue to live abroad despite rises in the cost of living leaving them out of pocket, according to a recent survey by Moneycorp

More than half of British expats will continue to live abroad despite rises in the cost of living leaving them out of pocket, according to a recent survey.

The study, by currency dealer Moneycorp, shows that over 50 per cent of expats say that while they moved abroad for a better standard of living, their incomes have actually plummeted since the economic downturn.

Despite these factors, nine out of ten expats said that they would continue to live abroad, with 25 per cent saying that they would rather move to another country before considering moving back to the UK.

The fall in incomes could be attributed to two factors: the decline of the British pound against other currencies; or the fact that many expats living off state pensions find their income is not index-linked.

 In 2007 an expat could expect to move to Europe with an annual income of £10,000 and see a return of £16,500, whereas in the current economic climate, the same amount would return just £11,000.

As reported earlier this year, in non-EU countries, like relocation hotspots USA and Australia, British citizens’ pensions are frozen as soon as they retire.

This means that a 65-year-old who retired in Australia today on a pension of £102.15 would still be receiving £102.15 in 2028. If inflation in these countries remains constant, then, according to online currency broker Currencies.co.uk, the value of these pensions could drop by half in just 17 years.

John Lawson, of Standard Life, says: ‘Retiring abroad is a dream for many people, but does require careful planning and advice.  Many people think living abroad is cheaper than living in the UK, but this isn’t always the case.’

The Moneycorp survey shows that many British expats are willing to shoulder the burden of lower incomes to retain their lifestyle while 80 per cent said they believed their children’s lives had improved.

David Kerns, Private Client Dealing Manager at Moneycorp said that although many Britons are happy overseas and enjoying a better quality of life, they are suffering from a rise in living costs and wanted to know more about transfer fees when moving funds abroad.

He advised expats:  ‘Speak to currency specialists to guard against adverse fluctuations. By locking into favourable exchange rates for up to two years, expats can protect themselves against the pound losing further value, as well as avoiding potentially costly transfer fees.’

He added: ‘Over a series of payments, these savings can run into the thousands of pounds.’

Original source: Thisismoney.co.uk

http://www.thisismoney.co.uk/money/news/article-2037381/British-expats-vow-stay-abroad-despite-squeeze-incomes.html#ixzz1YgqBgUnb

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