Falling value of the British pound causes financial problems for expatriates
There is a real risk that British expatriates living abroad may fall into substantial debt, it emerged yesterday.
According to reports in British newspapers yesterday morning, the Consumer Credit Counseling Service (CCCS) has seen a significant increase in the amount of calls they are receiving from British citizens living abroad who are seeking assistance with debt repayments. According to the charity, which offers people advice and counseling on dealing with debt issues, calls to their helpline have risen by 33% since the start of 2010, with over 500 people requesting their services in the first three months of this year.
It is believed that the increases in traffic have been caused by expatriates who have chosen to keep their earnings in pound sterling and have been severely impacted by the falling value of the pound. Such expatriates have been unable to maintain debt repayments as a result of their increased living costs abroad and now face severe financial difficulties. Expatriates living in Europe, a popular retirement destination for UK citizens, have been hardest hit as a result of a significant fall in the value of the pound against the Euro from 1.47 in 2007 to its current rate of 1.12. It is estimated that 5.5 million British expatriates have been negatively impacted.
Commenting on the issues facing expatriates in British newspaper The Telegraph, Louise Carver from the CCCS said:
“The decreasing value of the pound is the main reason that those living abroad are struggling to repay their debts.
“We have had people whose income had allowed them to live comfortably abroad, and although that income hasn’t changed, they have been left struggling to make ends meet.
“Many are considering moving back to the UK.”
A further spokeswoman for the helpline, speaking in another UK newspaper, The Express, revealed that those hardest hit are retirees living in Spain:
“Pensioners living in Spain are facing a big challenge when it comes to repaying their debts. Those over 60 tend to have higher debt levels anyhow and many are asset rich but cash poor.
“The decreasing value of sterling means that anyone whose pension is paid in British pounds has seen its value decline massively when they change it into euros. This is not a situation they expected when they moved to Spain to enjoy retirement.”
Before moving abroad it is crucial that you fully understand what the cost of living in your new location will be and how this compares to the cost of living of your home country. Our expat city guides contain the vital facts and figures you will need to truly understand the costs associated with living in your chosen destination and can help you to ensure that you do not find yourself under financial duress.
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