Plunging British Pound Saps Expat Pension Spending Power

[webfact]

Plunging Pound Saps Expat Pension Spending Power

By Lisa Smith

 

File photo

 

Brexit and the falling Pound is damaging the wealth of British expat pensioners around the world

 

The spending power of their state and personal pensions has dipped by a fifth in the past two years, claims research by pension administrator Equiniti.

 

And although expats in the Eurozone have suffered the worst financially, few British retirees around the world have avoided the devaluation of their pensions. Not only is the plunging Pound affecting how much they must spend as exchange rate gaps grow between major foreign currencies and Sterling, but inflation is also making goods and services more expensive.

 

Full story: http://www.iexpats.com/plunging-pound-saps-expat-pension-spending-power/

 

-- iExpats 2018-01-02

[Samui Bodoh]

And Brexit rears its ugly head...

 

Who didn't see this coming?

[lovinglife]

£ is 9% up against $ in 2017. level against THB

[tracker1]

Takeing a dive like most countries Canada Australia included

[simoh1490]

2 minutes ago, lovinglife said:

£ is 9% up against $ in 2017. level against THB

Not so....the £ is not up against USD, USD is down against the Pound, the dollar index is at 91%, only in people's dreams has GBP increased in value. And since THB tracks USD, it gives the appearance that GBP has remained flat, it hasn't. If by some chance USD recovers and strengthens, watch out GBP/THB because it will go sub 40..

[lovinglife]

Started the year at 1.24 now 1.35. Now 44 THB to £ same as Jan 2017. People that are paid a fortune to make forecasts have got every one of then wrong in 2017, excuse me if I don't take notice of yours.

 

[darren1971]

1 minute ago, lovinglife said:

Started the year at 1.24 now 1.35. Now 44 THB to £ same as Jan 2017. People that are paid a fortune to make forecasts have got every one of then wrong in 2017, excuse me if I don't take notice of yours.

 

another way to think of it is this, can you buy less or more with £10 in Thailand now than last year.... The £ has lost value.

[simoh1490]

4 minutes ago, lovinglife said:

Started the year at 1.24 now 1.35. Now 44 THB to £ same as Jan 2017. People that are paid a fortune to make forecasts have got every one of then wrong in 2017, excuse me if I don't take notice of yours.

 

 

"Started the year at 1.24 now 1.35. Now 44 THB to £ same as Jan 2017".

 

So explain to us what happened, did GBP strengthen/weaken or did THB strengthen/weaken?

Edited January 1, 2018 by simoh1490

[lovinglife]

1 minute ago, darren1971 said:

another way to think of it is this, can you buy less or more with £10 in Thailand now than last year.... The £ has lost value.

Prices are rising in Thailand so probably less. But £ is 44, same as Jan 2017

[lovinglife]

1 minute ago, simoh1490 said:

"Started the year at 1.24 now 1.35. Now 44 THB to £ same as Jan 2017".

 

So explain to us what happened, did GBP strengthen or did THB weaken?

$ has weakened against THB and £ in 2017. That's not a bad thing for US economy, helps exports, same as £ weakening against euro has boosted UK exports

 

[halloween]

35 minutes ago, tracker1 said:

Takeing a dive like most countries Canada Australia included

The Pacific Peso/THB ratio has not dived TYVM. 1/1/17 to 1/1/18 it has dropped a massive 0.4 baht, and spent most of the year higher than start figure.

Edited January 1, 2018 by halloween

[simoh1490]

4 minutes ago, lovinglife said:

$ has weakened against THB and £ in 2017. That's not a bad thing for US economy, helps exports, same as £ weakening against euro has boosted UK exports

 

Correct on all points.

 

So what will happen if/when USD recovers? https://www.investing.com/quotes/us-dollar-index-streaming-chart

[lovinglife]

As inflation is rising in UK and US bank rates are likely to be pushed up and that will strengthen the two currencies, and I suspect a deal will be reached between UK and EU and that will again strengthen the £. Eurozone is the tricky one because inflation is rising in Germany but the weaker economies cannot cope with interest rate rises yet, it's the problem a single currency has always posed for such a wide region.

 

Unemployment is the biggest issue for EU, especially youth unemployment, creating more decent jobs is far more important than whether or not an expat has as much to spend.

[simoh1490]

1 minute ago, lovinglife said:

As inflation is rising in UK and US bank rates are likely to be pushed up and that will strengthen the two currencies, and I suspect a deal will be reached between UK and EU and that will again strengthen the £. Eurozone is the tricky one because inflation is rising in Germany but the weaker economies cannot cope with interest rate rises yet, it's the problem a single currency has always posed for such a wide region.

 

Unemployment is the biggest issue for EU, especially youth unemployment, creating more decent jobs is far more important than whether or not an expat has as much to spend.

I don't agree with regard to UK bank rates. The UK economy can withstand one or two small base rate increases over time, much more than that and borrowing costs will rocket, given the high level of UK debt that would be disastrous for government and mortgage debt. The US is far better positioned, by virtue of its larger economy, to absorb base rate increases over shorter timescales, the net of that will be a disparity between UK and US interest rates which will more strongly favour USD which is already at a long time low. As for Brexit and the EU: we can only hope that some sort of favourable outcome to Brexit is derived, if it isn't it will be proportionately worse for the Pound whilst having almost no impact on USD.

[oldwelshman]

Basically, no one, so called experts or not, can predict what will happen in the future with currencies, its like playing roulette lol. The experts were so good in last few years they were the ones who caused the global recession.

[lovinglife]

1 minute ago, oldwelshman said:

Basically, no one, so called experts or not, can predict what will happen in the future with currencies, its like playing roulette lol. The experts were so good in last few years they were the ones who caused the global recession.

Your exactly right, 'The experts' have been hopeless in recent years, some of it is because they have vested interests and hope that their predictions will create an outcome to their liking. I've done far better than them, made a killing on the FTSE after it plummeted after the brexit vote.

[lovinglife]

20 minutes ago, simoh1490 said:

I don't agree with regard to UK bank rates. The UK economy can withstand one or two small base rate increases over time, much more than that and borrowing costs will rocket, given the high level of UK debt that would be disastrous for government and mortgage debt. The US is far better positioned, by virtue of its larger economy, to absorb base rate increases over shorter timescales, the net of that will be a disparity between UK and US interest rates which will more strongly favour USD which is already at a long time low. As for Brexit and the EU: we can only hope that some sort of favourable outcome to Brexit is derived, if it isn't it will be proportionately worse for the Pound whilst having almost no impact on USD.

I don't disagree that the US economy and with it the $ will do better than the £, but people have been talking the UK down for a long time now and it hasn't happened, London is full of EU people that can't find work in their own country. A deal will be reached because German industry demands it, Merkel can't even form a government at the moment the last thing she needs is a kicking from the massively powerful business community there. UK interest rates will rise in 2018 but you're probably correct, I'd guess maybe 0.75% higher by Jan 2019, UK has close to full employment now too which is a great success.

[KarenBravo]

1 hour ago, simoh1490 said:

And since THB tracks USD

It used to in the 90's, but, not any more. It now tracks a basket of currencies that represent their 10 largest trading partners.

If what you say was true, the Baht would never go up, or down against the dollar.

[simoh1490]

18 minutes ago, lovinglife said:

Your exactly right, 'The experts' have been hopeless in recent years, some of it is because they have vested interests and hope that their predictions will create an outcome to their liking. I've done far better than them, made a killing on the FTSE after it plummeted after the brexit vote.

You were doing really great until you wrote the above about experts and vested interest, all of which is so much blah blah and shows how little you really understand about economics and global markets.

[KarenBravo]

2 minutes ago, simoh1490 said:

You were doing really great until you wrote the above about experts and vested interest, all of which is so much blah blah and shows how little you really understand about economics and global markets.

.....and of course, you do, even after making a false claim that the Baht tracks the dollar.

Pot, meet kettle.

[simoh1490]

1 minute ago, KarenBravo said:

It used to in the 90's, but, not any more. It now tracks a basket of currencies that represent their 10 largest trading partners.

If what you say was true, the Baht would never go up, or down against the dollar.

I was trying to keep it simple at that point, but the fact remains THB does follow USD much more so than any currency in the basket since USD is a reserve currency. And the basket is no longer ten currencies but is now about twenty five. 

[simoh1490]

1 minute ago, KarenBravo said:

.....and of course, you do, even after making a false claim that the Baht tracks the dollar.

Pot, meet kettle.

Yes I do! I spent years on this forum as poster chiang mai arguing that GBP/THB would see sub 42, that at a time when it was 60 then 50, I've been around the block more times than I care to recall on the subject of Thailand/economics.exchange rates.

[smedly]

1 hour ago, simoh1490 said:

"Started the year at 1.24 now 1.35. Now 44 THB to £ same as Jan 2017".

 

So explain to us what happened, did GBP strengthen/weaken or did THB strengthen/weaken?

all currencies fluctuate and there is no doubt that sterling took a hit but so did the euro by an almost equal amount (and I have been watching sterling/euro for a very long time), the Thai baht is strong and has been for quite some time which for a country that relies heavily on exports  (which includes tourism) is not so healthy, there seem to be influential people in Thailand that want a strong baht while ignoring the national economic interest (again corruption steps in) - I suspect they are big money people heavily investing overseas

[KarenBravo]

1 minute ago, simoh1490 said:

Yes I do! I spent years on this forum as poster chiang mai arguing that GBP/THB would see sub 42, that at a time when it was 60 then 50, I've been around the block more times than I care to recall on the subject of Thailand/economics.exchange rates.

Riiiiiiiiiht. I see modesty isn't one of your vices.

[simoh1490]

13 minutes ago, KarenBravo said:

It used to in the 90's, but, not any more. It now tracks a basket of currencies that represent their 10 largest trading partners.

If what you say was true, the Baht would never go up, or down against the dollar.

As the value of the Dollar index declines, so does the value of the USD against other currencies, yes indeed THB does track and yes indeed it does go up and down against USD.

Edited January 2, 2018 by simoh1490

[simoh1490]

1 minute ago, KarenBravo said:

Riiiiiiiiiht. I see modesty isn't one of your vices.

I don't need to be modest about that particular aspect since I put up with so much grief from so many for so long on this subject, I was right, simple as that.

[smedly]

I also don't doubt that the uncertainty and volatility is making some people a lot of money feeding off the brexit process 

[KarenBravo]

2 minutes ago, simoh1490 said:

I don't need to be modest about that particular aspect since I put up with so much grief from so many for so long on this subject, I was right, simple as that.

Maybe you should read this paper from the IMF which shows that the Baht tracks a lot closer to other major Asian currencies than the US dollar.

 

https://www.imf.org/external/pubs/ft/wp/2016/wp16165.pdf

[smedly]

5 minutes ago, simoh1490 said:

I don't need to be modest about that particular aspect since I put up with so much grief from so many for so long on this subject, I was right, simple as that.

so you predicted brexit or was it nuclear war or some other disaster lol

 

can you get your crystal balls out and tell us all what happens next .................. there is a 50% chance you might be right 

[simoh1490]

3 minutes ago, KarenBravo said:

Maybe you should read this paper from the IMF which shows that the Baht tracks a lot closer to other major Asian currencies than the US dollar.

 

https://www.imf.org/external/pubs/ft/wp/2016/wp16165.pdf

I've already seen that. BOT has two obligations, one is to track within a range of an average of the ASEAN basket and secondly, to track against USD  in order to preserve exports status, that is why Thailand follows the managed float system. But since several countries in ASEAN also track USD, Singapore to a large degree, THB is seen to track mostly against USD.