Sterling drop cheapens the expats British pensioners
British pensioners on abroad have experienced how their pensions have dropped until a 10% and they are afraid of losing even more purchase power.
The Brexit still has consequences, mostly negatives, for the British economy. Shortly after the referendum, the sterling pound felt in the markets and it reached unremembered values since 80’s, while authorities and experts do not exclude it to keep going down.
One of the numerous of this drop’s effects is that one affecting British pensioners living abroad. The majority of this group reside in countries such as the United States, Australia, Canada, South Africa or Spain and, after the Brexit, their pensions’ value has dropped 8 to 10 points, following the British newspaper The Guardian, although in Spain this fallen has been slightly lower, only 7.5 points.
British expats pensioners are little more than a million of people (1.2 million precisely) and they are given their pensions in UK’s banks in sterlings or foreign bank in local currency. In that way, the received amounts use to vary regarding the current exchange rate’s value in the moment of payment.
Besides, pensioners living in European Economic Area’s countries are benefited from annual growths of their pensions; benefits that are not enjoyed by those living in third countries, around 560.000 pensioners, whose pensions are frozen.
All of this is up in the air with the UK’s exit from the European Union, that will oblige London to negotiate bilateral agreements with every EU’s country in order to remain the current situation although prestigious experts and consultancy firms are stating that it will be difficult for that status quo to not to vary and, in any case, it will be a hard tough process where it exists the pensions freeze.
However, British pensioners on abroad not only are worried about their lower pensions’ value but their assets remaining in the UK. A lot of them have savings, investments and rent properties. The housing market is stalled and the stock exchange fallen has diminished their investments’ profitability, so is still unknown how the addition of all of these setbacks will affect those expats’ assets, it is not know yet how neither when.
If you have any legal doubt on how Brexit could affect your savings, assets or investments please do not hesitate to contact us for a complimentary review at email@example.com
Del Canto Chambers’ newsroom