Madrid/Palma.—Research released yesterday by Lloyds TSB International provides new evidence of the pension gap faced by many older expats.
The survey of 1'168 expats living around the world reveals that only 30 per cent of those who are retired say their pension income is enough to sustain the lifestyle they want.

Furthermore, 52 per cent of expats who are still working recognise they will have to reduce their spending substantially once they retire.
Despite the squeeze on expat pensions, significant numbers of pensioners felt that their best course of action was to remain abroad, with 47 per cent saying that they thought their pension income would go further if they remained outside the UK, against only 18 per cent who thought they would be better off in the UK.

High living costs in the UK are the main reason for this sentiment.
Only 26 per cent of respondents thought they would have a lower cost of living in the UK than in their current country of residence.
Currency fluctuations are also a source of concern, with 50 per cent of retired expats with a UK pension saying they were worried about the effects of exchange rates on their pension income.

Many Britons who retired in Eurozone countries saw their UK pension incomes reduce dramatically at the start of the financial crisis, when the Pound fell heavily against the Euro. Emiko Caerlewy-Smith, Associate Director at Lloyds TSB International, said: “A growing pension gap is a real worry for many expats, some of who will have to significantly scale back the lifestyle they have been used to. “These worries have been particularly compounded for retired expats who draw a UK pension income, but spend in their local currency, as it means they are running a currency risk on perhaps all of their income. “An alternative approach could be for expats to transfer their UK pension into the currency of the country in which they have retired to, or plan to retire to, thus eliminating exposure to foreign exchange fluctuations. “Various international pension arrangements exist to serve the needs of British nationals working or retiring abroad. “Your pension can be one of your greatest lifetime assets so we would always suggest customers seek professional financial advice in this area.” Report overview: lResearch shows that pension income is insufficient to support desired lifestyles for most retired expats. l A majority of working expats expect to reduce their spending substantially when they retire. l Many expats believe their money will go further if they retire outside of the UK.