The value of the pound against the euro has declined by around 25% since mid-2007 despite recent euro weakness and the financial crises in Ireland and Greece. As a consequence, the cost of living for UK expats living in Europe has risen significantly during that time as they have seen their savings or pensions decrease in value.
At Moneycorp, we have registered a four-fold increase in enquiries from expats returning to the UK from Europe in 2010 compared to the previous year. In addition, the number of UK clients selling their properties in Europe has tripled during the same period.
As the government spending cuts come into force, and with GDP showing negative growth in the last quarter, this could have even more of an impact on sterling this year.
On the other hand, recent Moneycorp research reveals that 72 percent of Brits would still consider moving abroad. This points to a divide between people desiring a move overseas and the realities of doing so. For many expats in Europe, living abroad has proven too tough to maintain, but, the appetite back in the UK is still there to up sticks and settle in another country.
According to the research, Australia is the favoured destination for people longing for a new start, with over a quarter (27 percent) of those surveyed eyeing up a life down under. Oz is particularly popular amongst the middle-aged, with 33 percent of those individuals looking to move to Australia aged between 35 and 44. Other idyllic destinations include the USA (12 percent), Spain (nine percent), Canada (seven percent), France (seven percent) and New Zealand (four percent).
For many, the British weather is the clincher, with a quarter (24 percent) of those considering emigrating citing climate as one of the reasons for going. The most popular reason is general quality of life, with more than half (52 percent) of respondents suggesting that a lifestyle change would tempt them abroad. Other key factors in making the move include the UK economy (16 percent) and the UK political environment (12 percent).
Government cuts and tax increases have made many people in the UK dream of starting a new life abroad we expect to see a rising number of enquiries to Moneycorp from those looking to make a new start in places such as Australia, the USA and Spain.
Employment opportunities abroad are also a strong factor for making the move, with a fifth (20 percent) looking at moving overseas for work reasons. This is particularly true for males, with double the amount of men citing their job as a reason for emigrating compared to women (27 percent compared to 14 percent).
While employment is a strong consideration for Brits thinking about emigrating, almost half (46 percent) do not necessarily believe that they would be able to get a better role overseas. Almost a fifth (19 percent) claimed that they will be looking to change profession when moving overseas, whilst a further 18 percent of those questioned expressed concern about not being able to find a job.
Fluctuating exchange rates are of little concern to Brits thinking of moving abroad, with only seven percent of respondents citing this as their main worry. This is despite two-thirds (66 percent) of individuals potentially needing to transfer money from the UK on a regular basis for a pension or salary.
At Moneycorp, we’d strongly advise anyone who is tempted to move abroad to put their finances first. The dream can be shattered if you haven’t thought about possible currency fluctuations and how you’ll transfer money to the country you are moving to. For instance, buying a house in Australia worth $250,000 will currently cost £27,000 more than it did this time last year due to changes in exchange rates.
A foreign exchange specialist like Moneycorp can give you free expert guidance on the currency markets, and help you transfer your funds when the rates are in your favour. Currency rates can be locked in for up to two years with a forward contract, which can help individuals to protect themselves against adverse currency fluctuations. Expats should, therefore, carefully consider their money transfer.
David Kearns is dealing manager at Moneycorp.
