Ups And Downs Of Sterling- Can You Avoid Them?
The Ups And Downs Of
- Can You Avoid Them?
According to a report in The Telegraph on 4th November, retired British expatriates had lost around €5.5 billion/£4.9 billion in the previous two years as a result of currency movements.
The figures were calculated by currency exchange specialists HiFX. Director Mark Bodega, said:
"In the economic slowdown, everyone is feeling the pinch. However, Brits living in Europe and receiving a fixed inco
According to HiFX, the average income for those on state pensions had fallen by around €270 since January 2007.
Those with higher income from private pensions have obviously lost much more. A £2,000 monthly income now provides €760 less than it did in January 2007, while a £3,000 income now converts to €3,360 compared to €4,500 in January 2007 - a monthly shortfall of €1,140 for those who have left their pension funds in
If you can transfer your private pensions into a QROPS (Qualifying recognised Overseas Pension Scheme), you would have the option for your fund denominated in Euros and the income received in Euros, thus avoiding the falling exchange rates – as well as currency conversion and transfer costs.
HiFX point out that many retirees waste an average £300 by paying bank charges on the overseas transfer - charges that can be avoided. They calculate that each month the average retiree living abroad claims their pension through their bank and are charged between £10 and £30. Then many overseas banks levy average receiving charges of 0.4% of the total value of the monthly pension.
Using a foreign exchange company would allow you to fix an exchange rate for up to 12 months, and usually with no transfer, commission or receiving fees charged on top. If you had, for example, fixed a rate in mid June your pension or other income could now be converted to Euros at around €1.18 as opposed to the current €1.12.
Then the disappointing third quarter gross domestic product (GDP) figures were published which did nothing to help the Pound, and neither did Fitch’s warning that the record levels of government debt meant the UK was more at risk of losing its AAA credit rating than other major economies. These two factors caused analysts to ponder whether
The BoE quarterly Inflation Report released on 11th November was more dovish than expected – but at the same time not positive for the Pound.
Governor Mervyn King refused to rule out an end to quantitative easing and said there was no limit to the programme – just a few days earlier
Whether or not the Pound heads back to parity with the European currency remains an unknown factor, though various forecasts do expect it to do so in the next three to six months as the government debt expands and
On the other hand, if the economy starts to grow next year and the government debt is sold into world markets, then we may see improvement. I’m afraid I cannot give an answer as to which way things will go and there are a wide range of forecasts - for example the exchange rate forecasts for the end of 2010 range from just €0.86 up to £1.30.
We can hope for the latter but I certainly wouldn’t bet on it. Instead take advice from a wealth management firm like Blevins Franks on whether you can change the denomination of your pension and investment funds and avoid future negative exchange rate movements. If not possible, perhaps you can put your savings to work to provide a higher level of income which would balance out the currency loss. At the same time ask about using a specialist foreign exchange service for regular Sterling to Euro transfers, so you can avoid the extra costs and (especially if the rate temporarily improves) fix a rate for the next 12 months to ensure you receive a fixed income for the period.
For more information contact Mary Taylor,
Mrs Mary Taylor B.Ed hons Cert PFS
Partner
Blevins Franks Financial Management
Web site www.blevinsfranks.com
TEL 05 62 30 51 40
Inside the church you will see a horseshoe arch separating the nave from the altar. This is typically Visigothic. All the experts agree that the capitals above the pillars holding it, are Visigothic. The pillars themselves are “antique marble re-used.” Maybe even Roman. So it sounds to me that the church, maybe much smaller, existed in the 8th century and was renovated several times, obviously. The last one was done in 1853 – see the date above the arch.
Outside is a tiny graveyard. Standing in it one sees clearly the Romanesque style of the doors and windows. I believe the door on the left was not the original entrance – that would have been where is now the road, for the church was orientated west-east, as Visigothic churches always were. One entered St. Martin des Puits and saw that lovely arch straight ahead, and the frescoes.
