In these uncertain political times, the pound has experienced significant fluctuation. While the current chaos of UK politics might make you want to move overseas, it might also make you more concerned about your financial security overseas. We explore how you can protect your money abroad.
It goes without saying that we are living in uncertain political times. Friday saw Kwasi Kwarteng sacked as chancellor and the announcement of Jeremy Hunt to take his place. Although the pound has since strengthened, the turmoil caused by the former chancellor’s mini budget saw the pound weaken. Since then, Jeremy Hunt has reversed almost all of the previous chancellor’s tax cuts.
At the minute, the changes have many of us jolting whenever we get a news notification. The political uncertainty has caused worries for retirees living abroad.
Worries for British expats
Last week, British expats in Spain were seriously worried about the weakening of the pound. This is because, if the pound weakens significantly against the euro, then it has the potential to reduce the quality of life of expatriates. Many choose Spain not just for its nearness to the UK, its sunshine, and its coasts, but for a more affordable lifestyle.
After the Brexit referendum the pound lost over 10% and those on a fixed income from the UK, such as a pension, saw their spending power fall dramatically. However, GBP/EUR is currently above the five-year average.
How to protect your money abroad
In light of this, your dream of moving abroad may seem more daunting. You don’t want to be blindsided by your move turning out to be much more expensive than anticipated. The best way to protect your money is to be aware of exchange rates. For some, “currency” and “exchange rates” are words only used at the airport, when trying to get euros out for a beach holiday to Mallorca.
When purchasing property abroad, it is vital to be aware of exchange rates.
One problem that arises from purchasing property overseas is that there can be movement in exchange rates between reserving a home and paying for it.
Smart Currency Exchange
But if you are trying to purchase a home in Mallorca, the risks are higher. Our partner company, Smart Currency Exchange, can help you to minimise the risk of losing money. One problem that arises from purchasing property overseas is that there can be movement in exchange rates between reserving a home and paying for it. Smart’s solution to this is a Forward Contract. This means that you lock in the same exchange, for no further fees, for up to twelve months.
If you need to send money regularly overseas, Smart offers a Regular Payment Plan. This enables you to automate a transfer, scheduling payments at today’s exchange rate or one that you have locked in over a period of time.
If you find yourself in a situation where you need to transfer money ASAP, Smart also offers Spot Contracts, these enable you to make a transfer with today’s exchange rates
Protect yourself against uncertainty
What the pound will do next is uncertain. What the government will do next or who will even be in government next is uncertain. But uncertainty doesn’t feel good. And uncertainty around your savings and your overseas property is never a good feeling. The good news is that you can protect your money from being at the clutches of this uncertainty. You don’t have to be a British expatriate worried about how their pounds will translate into life abroad. By being aware of currency exchange rates, you can safeguard your money abroad.