British pensioners in the Balearics having to watch their pennies and cents. | Majorca Daily Bulletin reporter

Following up the article published by the Majorca Daily Bulletin online on Thursday about British pensioners feeling the pinch as a result of the gradual fall in the strength of sterling against the euro and the ongoing economic crisis in the UK, Ebury, the global fintech specialising in international payments and foreign exchange, has reported that the seven-year fall in sterling is pushing up living costs for UK pensioners living in Spain.

Ebury explains that, from September 2015 to the present day, the UK has experienced significant political and economic volatility as a result of dealing with both an orderly exit from the European Union and managing the pandemic and subsequent inflationary shock.

All this has led to a gradual depreciation of the pound which has penalised groups such as British pensioners who live outside the country and receive a fixed annual income paid in local currency.

In Spain, there are around 263,000 registered Britons, 26% of whom, around 70,000, are pensioners.
These would have seen the purchasing power of their pensions fall by 17% in this period.

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In addition, another factor that reduces the purchasing power of British pensioners is the strong pressure of inflation, which currently stands at 9% in Spain.

The situation is even more adverse for British retirees in the United States, who would have lost 27% of their purchasing power due to the depreciation of the pound against the dollar between 2015 and 2022.

Duarte Líbano Monteiro, Ebury’s regional director for Southern Europe, explains: “British expatriate pensioners are vulnerable to movements in the currency markets, and have been suffering for a long time already from the weakness of the pound. Unfortunately, those who have chosen a country such as Spain to spend their retirement are finding that the fall in the value of the pound is significantly reducing their living standards.

“Against this backdrop, the authorities should warn pensioners about the financial impact that retiring abroad can have on them, as the general exchange rate that many pensioners can access does not always match the real cost of making international payments,” Ebury’s regional director for Southern Europe added.

Ebury advises UK pensioners in Spain to ensure they are getting the best exchange rates available and to look for alternatives that also reduce bank fees and commissions to process payments as efficiently as possible.