More and more Brits are retiring abroad from the UK as the cost of living continues to bite while warmer climates beckon. Over a million British pensioners are currently living abroad while receiving their state pensions, with more of than 200,000 of these in Europe, according to the Department for Work and Pensions.
Whether you are thinking about retiring abroad from the UK or already have plans in motion, you need to consider how you are going to transfer money to and from your new home country. After all, the last thing you want is to be spending more of your hard-earned money than you should on foreign exchange fees.
Choosing the right money transfer provider will help you save money and make it easier for you to transfer money abroad. In this guide, we’ve delved into some of the things you need to think about when transferring your savings abroad, as well as how to compare money transfer providers so that you can get the best possible deal.
Why you need to consider money transfers when retiring abroad
Retiring abroad from the UK comes with a number of financial challenges, but one of the biggest things is being able to move pension funds safely to your destination country.
If you opt to receive your pensions in a bank abroad, you’ll be getting paid out in local currency, which means the exchange rate for that currency could make a difference to the amount that you actually receive. However, if you choose to have your pension or savings account at home, you will need to find a way to transfer funds abroad as and when you need them.
You may be thinking about transferring your pension through your high street bank – however, they can often charge high fees and it can take a long time for money to reach its destination through the traditional banking system.
Instead, you might wish to use a money transfer specialist that has dedicated networks for sending money abroad and offers competitive rates for transfers, therefore protecting your retirement savings and helping you keep more of those funds for your new life overseas.
Money transfer providers can also be really useful when it comes to transferring large amounts of money to buy property abroad. If you want to find out more, we’ve put together a dedicated guide with more information.
Will my pension be ‘frozen’ if I move abroad?
Remember that at the time of writing, if you are retiring outside the UK, you may find that your state pension is frozen (ie. it won’t rise with inflation) depending on the country you move to.
Pensioners who move to the European Economic Area, Gibraltar, Switzerland and some other countries that have a social security agreement with the UK – including the US – will see their pensions rise. To see the full list of countries that are included, go to the UK government website.
If you are planning to move to a country where inflation is frozen, ensuring you get the lowest possible cost for your transfers will be even more important.
Key factors to consider when choosing a money transfer provider
When picking the money transfer provider to help you transfer your pension funds/savings overseas, there are some key questions to have in your mind. Let’s discuss these below.
Will I be charged fees?
When comparing money transfer providers on sending money abroad, there are two types of fees. The first is the FX margin, which is effectively a rate that the money transfer provider charges on top of the real exchange rate. The second is a flat fee which some providers will charge to process the transfer.
As a retiree sending money across borders, it’s likely you’ll have a few big transfers to make – for example, buying property, paying for medical appointments or sending regular upkeep payments. Just remember that although some providers might put you off by providing a flat fee for transfers, this could actually end up being better value than another provider with a higher FX margin.
Thankfully, we’ve taken all the hard work out of these calculations with our money transfer comparison tool, which will help you compare transfer companies for your chosen amount and destination and show you exactly how much you will spend on your transfer.
What about exchange rates?
The exchange rate from GBP to your chosen currency destination can change over time, and if it moves in an unfavourable direction, this can really affect the amount you’ll have to pay to transfer money from the UK to your local bank.
Even small changes in rates can add up over time. If you’re sending money regularly, you might want to consider looking at an FX hedging solution offered by a money transfer provider, as this can help protect you from losing out due to changes in exchange rates.
How long will it take for money to be transferred?
Whether you are receiving monthly pension payments or need money now for an emergency, a faster transfer could be crucial
Compare providers based on the speed of transfer they offer. In some cases, they may provide same-day versus slower options, while in other cases it might not make a huge difference.
Can I trust the provider with my money?
If you’re sending money from the UK, always do some Googling to make sure that the money transfer provider you are using is a fully licensed provider and is regulated by the Financial Conduct Authority. Often, companies (particularly those we compare) will have this clearly stated on their website or in their terms and conditions.
It also can’t hurt to look up providers on our money transfer company reviews page or find out their TrustPilot score to find out what other users are saying about the company – the same applies to the next point.
How easy is it to use the money transfer provider?
While it may have been difficult to send money abroad before the internet came around, nowadays it couldn’t be easier, with providers often having user-friendly websites that take you step-by-step through the process.
That being said, not everyone is happy with arranging a transfer digitally, and you might prefer to speak to someone over the phone. In that case, take a look at our reviews to find out how different providers compare on customer service.
Use FXcompared to compare money transfer providers
Retiring abroad can be stressful. That’s why you should use our tool to quickly compare money transfer providers and help you tackle one of the most important steps: making sure your money joins you overseas safely, securely and at the lowest cost.
Use our money transfer comparison service and get started on your transfer journey today. Or, if you’d like to find out more about money transfers, check out our other easy guides on the topic in our personal guides section.
