State Pension Living Abroad

British pensionershave potentially lost out on over £10.6 billion[2] of their state pension living abroad since 2007 due to the falling strength of sterling, according to HiFX, the foreign exchange specialists.


  • Over one million [1] British pensioners live abroad and claim UK state pension
  • Average monthly pension for Brits has dropped by over €145.20[2] since 2007
  • Pensioners in South Africa get best return on state pensions
  • Pensioners in Switzerland fair the worst


The analysis of the top 13 countries where over one million British expat pensioners live and receive state pensions (see table one) revealed that an expat pensioner living in the Eurozone claiming state pension abroad could have seen their monthly pension income of £440.60[3] worth anywhere between €655.60 in April 2007 to €510.40 in April 2013, a difference of €145.20[4].

Mark Bodega, Director at currency specialists HiFX, commented: “The global economic downturn hasn’t settled down in any way. Unfortunately, Brits living abroad and receiving a fixed income in sterling have been hit particularly hard, missing out on £8.9 billion since 2007, and could not have failed to notice that they are now receiving less and subsequently now have a big hole in their pension pots. Pensioners have been struck hard by the on-going financial crisis, as well as importing and exporting volatility which has had a dramatic impact on exchange rates.”

Analysis of these top 13 countries has indicated that pensioners in South Africa are getting more for their money at ZAR13.70 against sterling, having fallen from just ZAR14.40 in April 2007. Pensioners in Europe fair the worst due to the on-going financial crisis hugely impacting exchange rates, they currently get €1.16 against the pound, falling from €1.49 in January 2007. Those in Switzerland have taken one of the biggest hits, going from 2.43 Francs against the pound to 1.41 Francs.

Mark Bodega, Director at currency specialists HiFX, added: “Pensioners in South Africa have seen the biggest return on their state pension, however, South Africa is notoriously very volatile, so they need to consider fixing for 12 months to avoid any drops in their state income. For those in Europe, the days of 1.3 – 1.5 against sterling are now over, 1.2 against sterling would now be seen as high. However, pensioners in Switzerland have not only taken the biggest hit in terms of their state income, Switzerland is also notoriously expensive and has high living costs, so pensioners hit will have been struck from both sides.”

Table one: outlining the highs and lows of sterling in 2007 and 2013 against key currencies and the difference to an average state pension.

Currency High (April 2007) Low (April 2013 Difference to average person’s state pension per month
GBP/EUR 1.49 1.16 -EUR145.20
GBP/ZAR 14.40 13.70 -ZAR308
GBP/AUD 2.45 1.44 -AUD444.40
GBP/NZD 2.75 1.77 -NZD431.20
GBP/CAD 2.29 1.53 CAD£334.40
GBP/CHF 2.43 1.41 CHF448.80

Source: HiFX data examined state pension returns in South Africa, Australia, New Zealand, Germany, Ireland, Italy, Spain, Cyprus, Netherlands, France, Portugal, Switzerland and Canada)

Advice for pensioners who are feeling the pinch:

“With further sterling volatility predicted, pensioners who cannot afford to see the value of their pension income decrease any further should consider using one of the Regular Payments schemes offered by many currency specialists in the UK.”

HiFX for example, runs a regular payment service to enable British people who have emigrated or retired abroad to manage their currency payments via direct debit and protect themselves against currency fluctuation by fixing exchange rates for between six and twelve months. HiFX do not charge their customers to send money overseas through their regular payments plan and they also eliminate all receiving charges by foreign banks.

Advice for pensioners who are feeling more bullish:

Those who are uneasy about fixing the exchange rate for up to 12 months and are more bullish about sterling’s future should at the very least shop around for better exchange rates and compare the rates offered by their high street bank with a currency specialist particularly one which offers an online service for smaller amounts of money.

[1]1,194,250 million living abroad. DWP Information, Governance and Security, Work and Pensions LongitudinalStudy

[2] The state pension is £110.15 in 2013/2014. Monthly pension is £440.60 @ 1.49 (rate at April 2007) = €655.60, £440.60 @1.16 (rate at April 2013) = €510.40. A difference of €145.2per month X 1,194,250 people = 173,405,100 x 72 months = Euros = €12.5 billion = 0.85 GBP = £10,556,496,026.45

[3]. The state pension is £110.15 in 2013/2014

[4] £440.60 @ 1.49 (rate at April 2007) = €655.60 minus £440.60 @ 1.16 (rate at April 2013) =€510.40 = a difference of €145.20

For further information please contact:

Mark Bodega, Marketing Director, HiFX, 01753 751776, [email protected]

About HiFX

HiFX is the UK’s premier provider of foreign exchange and cash deposit services. Established in 1998, HiFX launched the first online international money transfer service with live exchange rates and no hidden fees. Working with over 40,000 private individuals each year and approximately 2500 corporate clients worldwide managing their foreign exchange and currency needs, HiFX offers both companies and private individuals significantly better exchange rates and exceptional service.

The breadth of activity HiFX helps its clients with is far reaching. For private individuals activity typically includes overseas property acquisition, migration overseas, salary transfers, international pension transfers and high value asset purchase. For corporate clients it is an effective way to pay overseas suppliers and staff, receive international payments, settle invoices and conduct business abroad. Last year HiFX advised on and executed over £9 billion in foreign exchange and has in excess of £2 billion placed on the Money Markets on behalf of our commercial customers.

HiFX systems work to 99.999% uptime standards, and just like the worlds banks are independently tested. HiFX also uses independently verified online security with the highest level of VeriSign certification. HiFX is the service provider for the Post Office’s ‘International Payments Service’. If you send money overseas through the Post Office, you will be talking to HiFX.

Content credited to: HiFX April 2013

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