Slide in value of sterling putting dent in expatriate dream

Many UK pensioners are having to abandon their dream of retiring abroad because of the weakness of sterling.

Specialist currency broker currencies.co.uk said it had seen a 28 per cent jump in the number of retired expatriates who were selling up and returning to the UK during the past 12 months.

The group blamed the situation on a combination of the weakness of sterling, in which most

retired expatriates still receive their pension, and rising

inflation.

It said during the past five years the value of sterling had fluctuated by up to 67 per cent against the currencies in popular retirement destinations, having a dramatic impact on the amount of money people had to live off each

month.

For people who retired to eurozone countries, such as France and Spain, exchange rates on a typical monthly transfer of 1,175 have varied by 49 per cent during the past five years, from a high of 1,793 euros to a low of 589 euros.

Pensioners in the United States have seen a 53 per cent swing in the number of dollars they get for the same amount, while those in Australia have been the hardest hit, seeing the number of Australian dollars 1,175 buys vary by 67 per cent, ranging from 3,112 Australian dollars to 1,247 dollars.

Around half of people who retire abroad do not have a state pension that increases each year in line with inflation.

Pensioners who retire to countries such as Australia, New

Zealand and South Africa, which do not have a reciprocal social

security arrangement with the UK, have the value of their

state pension frozen at the date on which they left the

UK.

Stephen Hughes, chief analyst at currencies.co.uk, said: "For many years, the strength of the pound persuaded many pensioners to move abroad so their money would go further but now weak exchange rates and high currency conversion charges have hit many expat pensioners hard."