UK State Pension

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Parilla
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UK State Pension

Postby Parilla » Mon Mar 23, 2020 1:25 pm

Just a point of interest, something I have discovered this morning - I promise I'm not really a saddo, just becoming rather bored and stir crazy.

Some years ago, my wife and I both changed how we received our State Pension and had it paid in euros direct into our Spanish current account. This because it was converted to euros by the Pension Service at a far more favourable rate than we could obtain by any other method. This morning I received my monthly payment, which I was expecting to be lower than last month's, but not by such a large amount, over 100 euros less in fact.

So, I looked at each of the six payments we had received since January this year, and checked what exchange rate had been applied. I then compared those rates to the Visa Europe GBP-EUR rates on the same dates. In all six cases on those same dates, the Visa rate was better, ie an individual buying groceries or whatever in Euros with a GBP Visa credit card benefits from a more favourable exchange rate than the UK Pension Service, with all their buying power, provides

I think I'll be investigating alternatives again.

Parilla

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peteroldracer
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Re: UK State Pension

Postby peteroldracer » Mon Mar 23, 2020 1:39 pm

Doing an accurate comparison is difficult as you never know when the currency exchange was done - it will not be on the day they transfer it. I think we have to be prepared to face getting less for our pound for some considerable time - as the reality of Brexit becomes seen, plus of course the immense costs to the UK economy from the covid-19 crisis. Some definitive action by the UK government would probably help - showing strong management rather than the current "shall we, shan't we" dithering.
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fyfin
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Re: UK State Pension

Postby fyfin » Mon Mar 23, 2020 2:05 pm

Very surprised but it still my preferred option. The timing in your case was unfortunate, probably when the rate was at its lowest.
A huge difference though but look on the bright side , you'll pay less tax on income next year. Lol
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Beachcomber
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Re: UK State Pension

Postby Beachcomber » Mon Mar 23, 2020 2:47 pm

Unless you need it on a month to month basis a better option is to have it paid in sterling into a UK bank account then transfer funds when the rate is favourable.

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fyfin
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Re: UK State Pension

Postby fyfin » Mon Mar 23, 2020 4:11 pm

Definitely need it month to month lol
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Parilla
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Re: UK State Pension

Postby Parilla » Mon Mar 23, 2020 5:47 pm

Peter..o..r…, I know comparisons are difficult, I've been doing this sort of thing most of my working life, but I know the date when each instruction would have been given, and even using a 3 day window either side, the PS exchange rate was inferior to that of Visa Europe across all six transaction.

Beachie, I'm thinking you are right and we may go back to that, that is exactly what we used to do but if I'm being honest it wasn't just the financial gain that led the change, but laziness on my part - smack on the wrist due.

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Re: UK State Pension

Postby Manchesteral » Mon Mar 23, 2020 6:40 pm

I received my state pension sch as it is, two days ago, it was €50.00 less than last month, it's not a huge blow to me as I have other forms of income but I wonder how badly this affects others who have to live on a tight budget ?

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Re: UK State Pension

Postby El Cid » Mon Mar 23, 2020 6:57 pm

The exchange rate has been at an average of about 1.13 for the last 2 years. It is now about 5% lower. If someone is on such a tight budget that they cannot handle that, then they should not be here.

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peteroldracer
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Re: UK State Pension

Postby peteroldracer » Mon Mar 23, 2020 7:06 pm

When we moved over in 2005 the rate was 1.40, but we based our budget to see if we should move at parity - sadly a forecast that came true a few years after. Then again we went for Spanish lessons for 2 years before we moved...
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marios
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Re: UK State Pension

Postby marios » Mon Mar 23, 2020 7:31 pm

Why don't you get a revolut card, pay cash from your UK account onto it, exchange it on the app at the interbank rate into euro's then transfer it to your spanish bank account, no charges whatsoever, I use it all the time, I think you can transfer £4000-5000 per month free before they charge you, just checked and apparently limit is £50,000+.

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Re: UK State Pension

Postby morlandg » Tue Mar 24, 2020 10:18 am

marios wrote:Why don't you get a revolut card, pay cash from your UK account onto it, exchange it on the app at the interbank rate into euro's then transfer it to your spanish bank account, no charges whatsoever, I use it all the time, I think you can transfer £4000-5000 per month free before they charge you, just checked and apparently limit is £50,000+.
Marios - do you know if your spanish bank will regard this transferred money as your pension? In order to qualify for free banking.

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marios
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Re: UK State Pension

Postby marios » Tue Mar 24, 2020 10:23 am

Does it have to be from a pension, I transfer all my money initially through currency fair and now revolut but I am resident and with Sabadell and have the Expansión account for residents which allow free banking and free transfers within EEA.

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Wicksey
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Re: UK State Pension

Postby Wicksey » Tue Mar 24, 2020 10:25 am

Does it have to be pension? When we set up the Sabadell Expansion account we weren't getting pensions but just told we had to pay in 700 euros each month. It could be paid in with cash if we wanted. Looks like Marios has just posted the same!

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marios
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Re: UK State Pension

Postby marios » Tue Mar 24, 2020 10:28 am

Yes It does not have to be pension money at least with Sabadell.

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Re: UK State Pension

Postby morlandg » Tue Mar 24, 2020 11:27 am

Thanks. I'm with Cajamar and as I understand it I have to transfer my pension each month to qualify for free banking. I still pay charges on our debit cards.

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marios
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Re: UK State Pension

Postby marios » Tue Mar 24, 2020 11:30 am

Are you resident though?

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Re: UK State Pension

Postby Manchesteral » Tue Mar 24, 2020 11:35 am

El Cid wrote:The exchange rate has been at an average of about 1.13 for the last 2 years. It is now about 5% lower. If someone is on such a tight budget that they cannot handle that, then they should not be here.

Sid
On a general level I agree, but there are some who've been here for many years whose pensions have taken a pounding and probably can't or are unable to get back to the U K !

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Re: UK State Pension

Postby katy » Tue Mar 24, 2020 1:15 pm

Very true. I remember 1.59. Suppose you will pay less tax though.

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Re: UK State Pension

Postby Manchesteral » Tue Mar 24, 2020 1:36 pm

I wish !!


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