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Feel the sterling crumble…*

*(10cc – “Wall Street Shuffle”)

With the recent collapse in the pound’s value, those expats whose primary means of support is in sterling (like pensions, for example) are feeling the pinch just now – and some would-be expats are finding that they’re having to postpone their escape from the UK.

The Daily Telegraph reported last week that costs have risen dramatically within the past six months. Research from Foreign Currency Direct shows that living as an expat in the Eurozone (including the hugely popular expat destination of Spain, as well as France and other Mediterranean sunspots such as Malta) has risen by roughly 20 per cent.

Much the same can be said of the USA, with the average property price shooting up by over £32,000. This applies to the cost of living more generally, not just property. The Telegraph quotes a nice figure to illustrate this – the cost of a medium cappuccino in Starbucks, which has risen from £2.74 to £3.27. (Reminds us a bit of The Economist‘s famous “Big Mac” index, which is a good rough-and-ready way of measuring purchasing power around the world.)

It’s not quite so gloomy everywhere you look. Canada, a perennially popular destination as far as users of the British Expat forums are concerned, has only increased in price by 3 per cent as a result of currency movements – the pound has held its own comparatively well against the Canadian dollar. But prices have moved upwards for Australia and New Zealand-based British expats – although by a relatively modest 15 per cent in Australia and 8 per cent in New Zealand.

Is there anything you can do to ease the pain? Ultimately, probably not – if the rate is bad, then you have to wear it. But on the other hand, if you’re moving large amounts of currency around then it really does pay to look beyond your bank. There are several currency exchange specialists who can move the money quickly for you at an agreed rate that can be far better than what the banks offer.

(We’ve had personal experience of this. Our own bank in the Isle of Man wanted to charge us a hefty sum to transfer money from the dollar account we held with them into the sterling account we held at exactly the same branch! We asked CurrencyUK what we’d get if we did the exchange through them instead – and got a much better deal, even after paying the CHAPS transfer fee to send them the money.)

You can find out more about CurrencyUK by clicking on the banner below. (CurrencyUK pay us commission on any transfer you make, at no extra cost to you.)

 

PG Author: Kay McMahon

Kay has been an expat for nearly 30 years. She set up the British Expat website back in early 2000, whilst living in London and missing the expat life. These days she spends much of her time lugging computers and cameras around the world. (Dave gets to deal with all the really heavy stuff.)

1 Comment

Online Invoices 11-10-2010, 00:16

If you are going to be actively trading the FX from your foreign currency salary back into Sterling for example it makes sence to transact once a month, which means with FX rate fluctuations, you will ‘average in’ at a fair level.

If you hold all your pay in foreign currency and do it in one lump sum, you can either make significant gains, or you could lock in a decent loss depending on the FX when you convert your money.

If you have a view on the currency that you are being paid in then it will pay to try and trade this to fit your view, but agree with the article that states you should look beyond your account, set up an FX brokerage account, which should give you tighter bid-offer spreads and less fee’s.

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