Sterling Strength Means Expat Money Goes Further – May 2014

Written by Simon Hilton, senior foreign exchange consultant at World First

I don’t know about you, but to me, it only feels like yesterday that we were battling the winter. Yet we now find ourselves more than a third of the way through 2014; how did that happen?! Another year is racing by, but for the pound, it’s been a pretty good one so far.  A string of positive data has kept sterling on top of most other currencies. It’s a totally different picture now than the beginning of 2013, when sterling was weak, data was poor and the UK economy had been downgraded.

If you’re looking to buy a property in Europe, you’ll be pleased to hear that sterling’s current strength will enable you to get more for your money abroad. Just over a year ago, one pound would have got you €1.15 – now, one pound will buy you €1.21. Whatever the size of the transfer, your pounds will go further at the moment. However, the savings could be especially significant on a larger payment – and buying a house abroad definitely falls into that category.

There is also good news if you’re looking to buy further afield – sterling has just reached a four year high against the US dollar, with one pound now worth about $1.67, compared to just $1.49 in March last year. One pound will also buy you 1.81 Australian dollars (AUD) and 1.85 Canadian dollars (CAD), up from AUD1.45 and CAD1.53 just over a year ago. What a difference a year makes – when transferring £100,000 you’d now get $18,000, €6,000, AUD$36,000 or CAD$32,000 more for your money compared to this time in 2013. These savings could be the key to securing your dream home.

As well as favourable exchange rates, it’s also a great time to take advantage of property prices in desirable locations around the world, which aren’t rising as exorbitantly as they are here in the UK.

And the ease with which people are able to sell their house in the UK is certainly another factor; the seller’s market in Britain means around ten buyers are competing for every home, and house asking prices are hitting record highs. People are able to make a tidy profit from selling their UK homes and put it towards a new home abroad.

However, even with everything seemingly in favour of those looking to take the plunge and move abroad, making the dream a reality can still be a difficult decision.

But having spoken with a number of people who have made the leap of faith, I’ve found that most are extremely happy they did. Swayed by falling house prices in the south of France, retired couple George and Sarah Bond sold their West London property and bought a villa near Nice. Average sales value of French property has fallen by 2% and they were also aided by the strength of the pound. George said: “We wouldn’t change a thing. The weather, the relaxed way of life and friendly welcome... it’s been fantastic.” Sarah adds, “We do miss our friends and family back home, but apart from that, we don’t really miss living in England.”

Jennifer Mitchell moved to the Dordogne area of France after her husband died, and she hasn’t looked back: “I wanted a new life and a brand new start, and that’s exactly what I’ve got. I was given a really warm welcome, I’ve made lots of friends and every day I look around and am absolutely stunned by the beautiful countryside. For anyone else in my situation, I would recommend doing something similar.” 

These are just two of many inspiring stories of British expats who are embracing a new chapter of their lives. In both of these cases, the strong pound certainly helped them make their decision.

How else can a strong pound help British expats?

Those who have retired overseas and are getting their pension payments sent to their bank account in their new country of residence can make the most of sterling’s recent strength against many world currencies, including the euro.

As an expat, you can still receive your UK state payment as well as transferring your private pension overseas, provided it meets requirements set out by HM Revenue and Customs (HMRC). 

And if friends of family want to send you any funds in your new country, their money will go further with the current pound strength in their favour.

World First specialises in assisting private and corporate clients with foreign exchange transactions. World First transacted circa £6billion for their clients in 2013 and have a 3A1 credit rating from Dun & Bradstreet – the highest possible rating for a company their size. As well as a best-in-class online platform, regular transfer service and tailored hedging solutions designed to protect you from adverse market movements, they also offer excellent customer service. Winner of the Client Focus Award at the 2012 National Business Awards, each customer gets a dedicated consultant and all phone calls are answered within three rings.