The Highs and Lows of Currency
Mar Bonnin-Palmer makes sure you don’t get caught out by post-Brexit swings in the currency market – and secure a competitive exchange rate
Q. I am retiring to France and need to receive my UK pension in Euros. What is the best way to do so?
A The approach depends on whether or not you’re reliant on each monthly pension payment for day-to-day living costs. One option is to simply automate monthly payments.
You can also opt to fix the amount leaving your account in Sterling, the amount of Euros you receive – or both – by fixing the exchange rate as part of your Regular Payment Plan.
If you are more flexible and don’t need to receive payments at the same time every month, one way to get the best value out of your pension pot is to set up a market order. This targets a specific rate and converts the funds automatically into Euros.
If you’re worried about time running out before you can make a transfer, you can also set up a limit order, which triggers a transfer if the market hits a pre-agreed ‘lowest acceptable rate’ for your budget.
To have greater control on when money is transferred to your account, you can set up email and SMS alerts for particular rates and then decide how much to transfer if that rate is achieved.
Q. With all the uncertainty surrounding Brexit, I’m still not sure whether it’s the right time to buy. The Pound is up one day and down the next. What should I do?
A It has certainly made headlines more since Brexit, but the foreign exchange market always fluctuates. The best time to buy is when you are ready – that means when you have established your budget and you are clear about what you are looking for. If you feel confused by the fluctuations in the value of the Pound, a currency specialist can suggest a range of tools to help you manage your budget when buying a property overseas.
Q. What makes a ‘favourable’ exchange rate?
A What makes a good rate will depend on the general market conditions. We recommend registering with a currency specialist at the beginning of your search, and before you travel to France to look at properties. Opening an account doesn’t incur any cost or obligation; plus a currency specialist will help you understand the different ways to buy the currency depending on your budget, timeline and the market conditions.
Q. When is the best time to lock an exchange rate? I don’t want to jump the gun if I haven’t found the right house.
A A currency specialist like moneycorp will allow you to lock a rate in advance – up to two years prior to the payment. But timing depends on both the market and your own circumstances. One of the main reasons for locking a rate in advance is to take advantage of a favourable rate movement. Buyers might want to fix the rate for the full asking price as soon as they find a property. There is nothing worse than falling in love with a property only to find out later that the market has changed and you can no longer afford it.
Q. What’s the difference between a bank and a currency broker?
A Currency specialists may be able to offer better exchange rates – which can make a significant difference (a single percentage point can have an impact) – and lower fees, together with personal support and market guidance from an expert team.
Should you want to receive more information about rates and how to make the most of your international payments you can register for free with Moneycorp. Plus with FrenchEntrée you are entitled to FREE transfer fees on all your currency payments.
Mar Bonnin-Palmer is a Senior Key Account Manager at Moneycorp, a foreign exchange expert and a specialist in currency transfers for overseas property. For more information, please visit the FrenchEntrée Currency Page or call +0044 (0) 20 3773 6355.