What is your pension worth?

With many struggling to get by on a British pension plan, the last thing pensioners should be spending their pension and retirement money on is bank charges. But that is exactly where £2 million worth of British pension cash is going each year.

International transfer charges

Foreign exchange specialist Moneycorp has found that, while high street banks vary in the amount of money they charge for sending money abroad on a regular basis, some of them charge up to £20 for each international transfer.

Transferring pension payments abroad

Thus, by regularly transferring their pension payments abroad, pensioners are spending far more than necessary. Marc Morley-Freer, Commercial Director of Moneycorp’s Private Clients Department, said,

“Our analysis shows that many high street banks are providing poor value to retired people living overseas…Falling house prices and higher costs of living may already be taking their toll…I doubt retired people are happy about giving such significant proportions of their pension payments to banks in exchange rate margins and transfer fees, especially as the Pound’s recent fall against most major currencies may be making it difficult for pensioners living abroad to make ends meet…To get the very best deals on foreign exchange we advise people to shop around…Foreign exchange specialists generally give the most favourable exchange rates and charge significantly lower transfer fees.”

What about the Euro?

Back in January 2007, couples who received the basic state pension plan of £628 a month used to get €961 when converting it. Now, due to a weakened exchange rate, that money only translates into €676.

As the currency markets are currently so volatile, Britons living in Europe and receiving their pensions in pounds are being hit hard.

Transfer fees

Currency specialist HiFix found that each month the average retired person living abroad pays anything between £10 and £30 in transfer fees and other bank charges to have their pension paid into their bank.

Where are the pensions going?

Of the 1,080,000 Britons who have a state pension paid to them abroad, the largest portions being paid into Australian bank accounts.

Canada follows in second place, followed by the USA, Republic of Ireland and Spain.

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