UK pensions and retiring to France
Discussion
Might be thinking of retiring to France in the future (long after Brexit but spouse is French citizen) - what issues around pensions would we need to take into account? Presume currency fluctuation is a major one, any ways of hedging against/taking advantage of that?
One pension is DB final salary so not sure how flexible that is, but the others are private/company DC pensions - is it worth looking to move the pot to the new currency (if that can be done under current rules) rather than taking an income in GBP and converting on a regular basis? Annuities seem to be less popular these days anyway, and there are some savings/ISAs in the mix too.
One pension is DB final salary so not sure how flexible that is, but the others are private/company DC pensions - is it worth looking to move the pot to the new currency (if that can be done under current rules) rather than taking an income in GBP and converting on a regular basis? Annuities seem to be less popular these days anyway, and there are some savings/ISAs in the mix too.
I early retired to France 12-years ago. I have both DB and Personal pensions paying into a UK account and make transfers to my French account, as and when. No one offered to pay Euros, though I am not sure I would have wanted that anyway.
My wife was a Sernior Civil Servant and they offered her the option of Euros. Both our State pensions were offered in Euros, but again we chose £Sterling.
I suppose that offer could change post Brexit. I don't think the offer is available to pensioners living outside the EU.
I like to control the timing of when I convert £Sterling to Euros as a couple of days either side of an MPC meeting can make a significant difference. If it is a fixed date, you lose that flexibility.
My wife was a Sernior Civil Servant and they offered her the option of Euros. Both our State pensions were offered in Euros, but again we chose £Sterling.
I suppose that offer could change post Brexit. I don't think the offer is available to pensioners living outside the EU.
I like to control the timing of when I convert £Sterling to Euros as a couple of days either side of an MPC meeting can make a significant difference. If it is a fixed date, you lose that flexibility.
That's interesting, thanks.
So you would have seen around 3 years with an exchange rate around 1.45, one tumbling year, and then 8ish years where it was mostly below 1.2? Did that have much of an impact on your lifestyle or spending? Did you ever look at ways of mitigating exchange rate variations?
So you would have seen around 3 years with an exchange rate around 1.45, one tumbling year, and then 8ish years where it was mostly below 1.2? Did that have much of an impact on your lifestyle or spending? Did you ever look at ways of mitigating exchange rate variations?
You can get your pension paid in Euros, but the rate wouldn't be particularly favourable.
One option is to use a currency broker, and you can do it one of two ways. A Regular payment plan, which effectively means setting up a standing order, and the broker would lump your funds with others getting you a better rate. however, rates would change each month for better of for worse depending how the market is.
Another option to give you a fixed cost, is to fix a 'Forward Contract' which allows you to freeze the current rate for up to 2 years, so you know what you're getting back each month. Of course while giving you the ability to budget, you can't then subsequently take advantage of any gains in the rate should it go back up. The FX brokerage I work for does both, but I'm not plugging my service, there's other brokers out there to choose from
One option is to use a currency broker, and you can do it one of two ways. A Regular payment plan, which effectively means setting up a standing order, and the broker would lump your funds with others getting you a better rate. however, rates would change each month for better of for worse depending how the market is.
Another option to give you a fixed cost, is to fix a 'Forward Contract' which allows you to freeze the current rate for up to 2 years, so you know what you're getting back each month. Of course while giving you the ability to budget, you can't then subsequently take advantage of any gains in the rate should it go back up. The FX brokerage I work for does both, but I'm not plugging my service, there's other brokers out there to choose from
Twilkes said:
That's interesting, thanks.
So you would have seen around 3 years with an exchange rate around 1.45, one tumbling year, and then 8ish years where it was mostly below 1.2? Did that have much of an impact on your lifestyle or spending? Did you ever look at ways of mitigating exchange rate variations?
We bought land and built at an average of €1:60. The big worry was after Lehmans 2008/9 when we were at €1:08 and looking like parity. So right now €1:14 does not seem too bad.So you would have seen around 3 years with an exchange rate around 1.45, one tumbling year, and then 8ish years where it was mostly below 1.2? Did that have much of an impact on your lifestyle or spending? Did you ever look at ways of mitigating exchange rate variations?
We are very fortunate in that income still exceeds expenditure and so the exchange rate has been a worry, rather than a serious problem.
Being French resident for tax has proven to be a bigger factor affecting disposable income as we are seen as a veritable cash-cow.
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