When Rod and Linda decided to retire to France in 2004, they thought that they would be well off and live a comfortable life with their monthly pensions and being able to buy a house outright – meaning no mortgage.
In 2004 they were able to get just over €1.4 to £1.00, petrol was at least 30% cheaper than in the UK, food prices were lower – in fact almost all costs were lower than they had been back in Lancashire in the UK.
Now, though in these are days of recession and uncertainty in the currency market across the world, Rod and Linda are finding that their Euros don’t go anywhere near as far as they did a few years ago.
Food costs have increased, fuel costs, electricity, rates and water – as everywhere else in the world costs are on the up in France.
Rod says that after examining the couple’s finances and trying to find ways to cut costs, one of the things he looked at was currency transfer costs. They had always used their UK bank to transfer money as and when they needed it but Rod says that he found he could in fact make savings by using a currency broker.
He got a better rate with the broker than he did with his bank and he got advice as to when to transfer money. This is particularly helpful as the couple need to fund the purchase of a new car so will be transferring a larger amount than usual.
They can, if they wish, arrange that the amount of €30,000 that they need for the car can be transferred at a fixed date and at a protected rate.
For instance if the £ is high against the Euro today, but you don’t need the money transferred until a few week’s time, you can purchase an order to buy at today’s higher rate – called a forward contract. You need to bear in mind though that if you fix the exchange rate with a forward contract, that’s the rate you get, even if the rate later improves. A curency broker can tell you if the rate is higher than it was at any given point and will keep up to date with world events and suggest that things may or may not improve for your currency against the Euro in the short or long term.
With a forward contract you can’t fix the rate at 1.15, and then change it if the rate goes up to 1.16, but if the rate drops to 1.14 you will still get 1.15. In this way, a forward contract protects you if the rate falls, but you’re unable to capitalise if it rises.
If you need to regularly transfer money from the UK to France it may pay you to check with a reputable foreign exchange company what your options are. You may find that there are in fact considerable savings to be made by fixing the rate, getting a better rate and getting advice on when to transfer.
Always make sure that you use a reputable and authorised company to make money transfers.
More on how to transfer money to France
The Good Life France uses Universal Partners FX who specialise in overseas property purchases. Registration is easy and secure, plus there are no added fees. They save their customers thousands of pounds with their advantageous rates of exchange and guidance. You can speak to one of their experts over email or phone…