Costa living going up?
You can't get away from coverage of the UK's economic woes and the weakness of Sterling. But iPM listener Robert Hoyle emailed to say that not every angle's been raked over quite yet. He says no one talks about the plight of Brits abroad, especially the retired.
"Pensioners have seen their pensions decrease by 30% this year when paid from the UK."
Last week, the former Europe minister Denis MacShane warned in a speech that expats across the EU would bear the brunt of the credit crunch.
"I'm not sure I would even want to be a Brit in Spain. There are already some low-level rumblings in Spain that the ageing end of the British population are demanding the care and attention that older people do."
Heard any rumblings? Been rumbled at?
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I think the expression on Denis McShane's face is entirely appropriate. What next? Estate agent redundancies?
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Are two of the girls dancing Pep and Tessa?
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Many of my friends in the south west of France are feeling the pinch. When I retire in two years, my expected UK local government pension will not go anywhere near as far as expected. My wife's pension has been similarly reduced. She is a French citizen having spent her working life in the UK. Having already adjusted to the reduced circumstances of retirement and perhaps chosen to leave the UK as it meant mortgages could be paid off, how do you adjust to a 25% drop in income coupled with a burst of inflation? Returning to the UK is not an option. Many have fallen below French definitions of poverty without the accompanying entitlement to assistance as the income is from abroad.
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Hi - I am nearly 70, and my husband is 83, and we moved to France for health reasons in 1974. We seem to have made every financial mistake in the book. My husband was a freelance writer, so no company pension scheme. He took out a small private pension - with Equitable Life. When that company collapsed, our pension was finally cut by two thirds. We do not qualify for the Heating Allowance, (even though the temperature drops into the minus area in winter) because we were not claiming it before we left the country. Now, we are loosing a third of the little we have left because of the strength of the Euro against the pound.
We can only heat one room, using a wood burning stove - central heating is too expensive to run, even in our little house. We eat one cheap meal a day, plus porridge for breakfast.
We did not expect luxury living - just a simple rural life - but our savings have nearly gone, and it is getting a bit dodgy now!
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Senior moment! In my post, I said that we came to France in 1974 - I meant to type 1994 - can it be changed?
Leonora -sorry.
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We retired here to South East France 5 years ago. We had to pay into the French health system even although my husband was 60 and we had paid our national insurance contributions all our life in the UK. When he was 65 we qualified for health cover from the UK with the form E121 which made a big difference but only up to 70%, we have to make up the difference with private insurance which costs us 110€ a month. We do not qualify for the heating allowance even though the temperature drops below freezing in Winter because we were not in receipt of it before we left the UK. We have been living on my husband's occupational pension for the last 5 years but now we have lost 25% of our income due to the falling pound against the euro. Returning to the UK is not an option.
Ironically we are still UK tax payers as my husband was a teacher and our pension is taxed at source as all public service workers. The Uk is quite happy to take our tax but give us no assistance in return.
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Leonora's comments are typical of my contacts. We live in a small village in the Dordogne. There are about half a dozen retired British couples in our village living on UK pensions. Six hundred similar villages in the Dordogne. About twenty departments with a similar British population. As the Americans say, do the math! Not to mention Spain.
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I've been writing about expat personal finance for the past quarter century. Denis McShane's comments are wide of the mark. The main issue facing British expatriates has nothing to do with latent Spanish racism - after all Brits contribute a great deal to the Spanish economy - and everything to do with the way the pound is falling against the euro.
The erosion of sterling means Brits abroad living on their pensions are on average 25% worse off than they were six months ago. Couple that with the changes to state healthcare provision, as some European countries rewrite the rules governing who's entitled to what, and you start to get a sense of just how serious the situation is becoming for the expatriate community, and especially our senior citizens.
My book, Expat Money: the Definitive Personal Finance Manual for Brits Abroad, may be of some assistance to those of you who are struggling, and will certainly help anyone thinking of emigrating to work or retire abroad in the near future. It's available from publisher Summersdale.com.
Hannah Beecham (www.expatmoney.blogspot.com)
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After working in the UK as a freelance PR consultant for 30 ywears I retired to SW France in 2004 with a state pension and two extremely small personal pensions all of which have been affected by the credit crisis. Still taxed in the UK I have a bill to pay in excess of £350 in January and am desperately trying to live on my pensions. Any savings have to last an awful long time.
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My friends who spend every winter in Spain left last week as usual -normally they return at the end of April but as they were getting ready to leave they remarked that they would be back when their allocated money run out and said that could be any time in March.
Hopefully they'll bring me back my usual bottle of Brandy -but they might not have enough money left -'Ah, c'est la vie'
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This, I think, says it all. Unfortunately...
http://www.independent.co.uk/news/world/europe/costa-lot-expats-forced-to-tighten-their-belts-1028258.html
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Like many of your other contributors we consider ourselves Europeans and wish the majority of our countrymen and women would do likewise and stop this nonsense talk of Foreigners across the Chanel.
We retired early to France in 1999 on a small private pension to enjoy a less stressful lifestyle. We contribute to the French Tax and social security system and have a private mutual health “top-up” scheme which will provide almost a 100% cover.
We paid into the UK tax and NHS system for all of our working life and I received a full UK pension from 2007.
BUT we do not receive the winter fuel allowance since we were not in receipt of it prior to our leaving the UK. The more this allowance increases – the LESS entitlement we receive as pensioners but the winters have been as low as minus 15 degrees Celsius.
We thought that there is a European directive to the effect that expat citizens should not be legislated against – but so far MP’s and MEP’s have nothing to offer.
The loss of the fuel allowance together with the disastrous exchange rate means that our income is severely lower than it would have been in the UK – possibly by as much as 30%.
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Unlike most of the contributors whose comments I have read, I feel I am better off living in Europe. I ended my working life here in France and chose to take a french state pension. Under European legislation the contributions made in the UK were added to those made in France and I receive a percentage of the salary I earned plus a small occupational pension. Due to ill health I retired at 60 and the French system credited me with the missing years of contributions. Would the UK system have done the same?
The total is not enormous but it is paid in Euros and I am sure that I am better off living here than I would be in the UK on a similar pension. I do feel sorry for the few people who are living in very difficult circumstances but I suspect that many of the contributors are not as badly off as they pretend. They chose the expat lifestyle for material reasons and 25% from quite a lot still leaves a tidy sum.
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Why didn't we hear from all these ex-pats when the pound was strong and they were raking it in?
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here! here! Dawley-Magna and markliff.
Re; ipmlloyd;- With the greatest respect - if you don't like the way you are being treated then move back - or move to a milder part of France?
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There is no doubt that the current economic downturn adversely affects pensions, but it is equally true whether you live in Britain or overseas. The biggest problem financially of living in the Euro zone is the loss of income due to the poor exchange rate between the pound and the Euro. My husband and I retired (very early due to an early retirement offer from a UK university which was too good to refuse) to Italy in 1996; we didn't move here "for material reasons", we moved her to improve the quality of our life. Italy undoubtedly has many problems, some of which seem insuperable, but we would not return to live in the UK. The deciding factor for us is the high standard of public behaviour in Italy - courtesy, respect (especially across the generations), no public drunkenness or loutish behaviour, politeness, generosity - the list is endless. How could we ever go back to the increasing boorishness of British society? There are some things worth more than money.
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Had the UK joined the Euro there would be no problem of devaluation of sterling pensions.
Had the UK supported the social chapter we would probably have had closer cooperation and greater integration of social provision.
Had the UK joined the EU travel area it would have been as easy to travel from here to England as it is from here to Greece.
Having contributed tax and National Insurance to the UK system for a working life and chosen to retire to France, I will simply have to tighten my belt. I hope that the UK economy and the pound will soon strengthen but am happy to be here.
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Having just buried my 96 year old mother and cashed in the £10 cheque, all that was left of her estate after 17 years self-financing in a comfortable nursing home, saving the government money, I'm reflecting on my situation. We retired here in S.W. France in 2004 because of my arthritis and my husband's asthma, both of which are much better, coupled with the supperb health care. We don't get winter fuel allowance because it's lovely and mild here. We still pay great lumps of tax from our teachers pensions b ecause the government insists on taxing at source. Our pensions are paid in pounds - a euro was 67p when we came here, it's now 87p - could some adjustment be made to ex-pat tax codes? We make no demands on the U.K. - as residents we pay all the French taxes. If it will save the British govt. money we will even return to England occaisionally and, as usual, get caught by speed cameras. We'd love to be able to leave something for our children but it looks like they will have to bail us out and pay for our funerals too!!
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If you are a non-taxpayer in France it may be possible to get reductions in your Taxe d'habitation if you are over 60, and (I think) your taxe fonciere once over 65. Check at your local Mairie.
I don't pay income tax, so don't pay any taxe d'habitation at all, nor the TV licence which is linked to it. I have opened a current and savings account currently paying 4.5% with La Poste, and have to produce my tax statement each year to verify I still qualify. And how did I find out about these? By talking to my French neighbours. There is also a useful website, Seniorplanet, which offers all sorts of up-tp-date information as well as tax and legal tips specially for pensioners. It is in French though.
Yes, it is very much tougher than 6 years ago, but my veg plot and orchard have stocked 2 freezers, plus contacts for meat etc. They also say here: if you heat your house with wood you heat yourself twice - very true!
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Perhaps we should all move to Scotland. With a Scots Prime Minister and a Scots chancellor and so forth, we should be OK even as English. Oh what was that West Lothian question?
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