With an ever-increasing number of people choosing the warm Mediterranean region in which to spend their retirement, financial planning and budgeting is an important part of making that decision.
Many have pension schemes or saving plans in their home countries, income from which needs to be regularly shipped over to their local bank accounts in Euros. But with constantly moving exchange rates, and the uncertainty caused by events such as Brexit, what are the options, and how can you ensure you are getting the most for your money?
Traditionally, most people have simply had their pensions or investment income paid into their home bank accounts and then sent directly over here to Mallorca by their bank. Alternatively, they may well be receiving their income in Euros directly from their pension provider. But there are of course a few downsides to this. The first is very simply the exchange rate they receive – often very different to the rates quoted publicly – or the “inter-bank” rates as they are known. Secondly, when rates are moving all the time, you never receive the same amount of Euros, even though your payments are fixed in your home currency. And this can make it difficult to budget with certainty. But fear not! Things can be done to help.
By using an authorised specialist currency broker, the exchange rates you receive will be better than those from your bank – between 2% and 6% usually. Now that’s a great saving to have, but what about the fact that rates are constantly on the move? Well, did you know thats with some companies rates can be fixed for any period up to 2 years? By seeking the advice of your broker, they can advise on the best time to do this, and then you can relax knowing that you will receive exactly the same amount of Euros each month. And that makes budgeting a lot easier. But to make life even more simple, sometimes you can even have your pension and investment income paid directly to your currency exchange broker by your provider, thus automating the whole process, leaving you with more time to enjoy the wonderful lifestyle you chose to retire to. We all love an easier life!
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This article was written on the 11th of September, 2017.