British expats that live in Europe and receive a state pension will notice an increase in their weekly income, by as much as 10 per cent, according to Prudential.
The value of UK state pensions that are paid in Euros is now at an all-time high. The increase is largely due to the heightened value of the pound against the Euro. Prudential’s analysis shows a rise in the basic state pension of €661.24 since this time last year. The pound was worth €1.25 at the end of June compared to €1.17 at the end of June 2013 and substantially higher than the low of €1.14 in March 2013.
Paul Fidell, investment expert at Prudential, said: “The relative strength of the pound means that expat pensioners have effectively benefited from a pay rise over the last year. However, if they are totally or heavily reliant on the State Pension for their retirement income, it is important not to fall into the trap of overestimating its buying power.”
Due to the ‘triple lock guarantee’ that the UK government has in place, any retired British expats living in the Eurozone will experience a minimum 2.5% boost to their state pension every April. There are currently 61,550 UK state pension recipients living in and moving to France and 106,820 in Spain, however the highest number of British retirees in a Eurozone country is in Ireland (132,070).
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Information correct at time of publication