Getting UK pension shortly - bank charges, FX?

J

johnfenit

Registered User
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I am residing in Ireland. I will be claiming UK state pension shortly and have the option of using the HMRC International Pensions Direct Payment which will pay the Euro amount into my Irish Bank Account thus saving on FX costs?

Wondering is this best option or should I select my Revolut account as the nominated account to receive pension as sterling £ amount?

thanks

john
 
If you have to make a tax return here to declare overseas income it is less hassle to return the euro amount you received into your Irish bank.

But if you won't be needing the pension as a regular income, you might like to watch the fx rate and pick your time to make the transfers.

Transfer charges are less important than the fx variation, but the pension is a small amount anyway, so I take the easiest option.
 
Paying the pension direct into your euro bank account does not do away with bank fees and Forex charges - it just hides them.

I get a UK pension directly to my euro bank account, and when I compare the exchange rate between the £ amount and the € amount it is close to the official rate but other than that I have no idea what bank fees are paid.

But it is not my time and effort in setting up a sterling account and managing the transfers myself - I would imagine the DWP (pensions are paid by DWP) have a huge volume of overseas pensions and negotiate the fees on a competitive basis.
 
Gervan said:
ike to watch the fx rate and pick your time to make the transfers.
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This is bad advice.

A punter has no special insight into exchange rate movements. Focus on whatever has lowest fees and forget about trying to time the exchange rate market.
 
NoRegretsCoyote said:
This is bad advice.

A punter has no special insight into exchange rate movements. Focus on whatever has lowest fees and forget about trying to time the exchange rate market.
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I would disagree with the above. Fx rates go up and down. If you do not need the funds immediately then you could wait until the fx rate is favourable and transfer on a lump sum basis. I dont call this "timing" fx rates, although it is. I just call it waiting until the rate becomes more favourable - which it inevitably will. You may however need your regular pension more timely rather than waiting for a favourable rate.
 
How do you know when it is "more favourable"?

maybe it will be more "more favourable" the week after it is "more favourable"?
 
Its not rocket science lads, I wouldnt over think it.
Just keep an eye on the rate and when it moves a bit higher, say above 0.90, then make the transfer. Might be waiting a while but if you can afford to wait then it may pay off.
 
jim said:
Its not rocket science lads, I wouldnt over think it.
Just keep an eye on the rate and when it moves a bit higher, say above 0.90, then make the transfer. Might be waiting a while but if you can afford to wait then it may pay off.
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This is gold, and shows the value of your 'advice'.

The thread is about converting GBP to EUR.

You realise if you are converting GBP to EUR that you benefit from a LOWER exchange rate, not higher?

As you said yourself, it's not rocket science.
 
I think you are over complicating this one Redonion.

My suggestion to the OP is to hold the gbp in a uk a/c until such time as the fx rate becomes a bit more favourable to then. And then transfer it to their euro a/c.
 
jim said:
I think you are over complicating this one Redonion.
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No Jim. I'm pointing out a blatant factual error in your advice.

If anyone made the mistake of waiting for the exchange rate to increase, as you suggested, they would be losing money.

It's OK to admit you were completely wrong on the way exchange rates are quoted.
 
1 euro currently buys about 86p. If it were to go higher above say 90p that would make it more attractive to then trf gbp to euro as you can buy more gbp for your euro. Im not sure what factual error in my post you are so irate about.
 
if € 1 = 86p, then £ 100 = € 116
if € 1 = 90p, then £ 100 = € 111
 
jim said:
1 euro currently buys about 86p. If it were to go higher above say 90p that would make it more attractive to then trf gbp to euro as you can buy more gbp for your euro. Im not sure what factual error in my post you are so irate about.
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If the euro gains from 86p to 90p, then that is more attractive for somebody selling euro to buy GBP.

A stronger euro is better, in terms of getting more GBP per euro.

BUT

This person is earning GBP, and plans to switch it to euro, as they live here. So they want the GBP to be stronger, euro to be weaker.
 
jim said:
1 euro currently buys about 86p. If it were to go higher above say 90p that would make it more attractive to then trf gbp to euro as you can buy more gbp for your euro. Im not sure what factual error in my post you are so irate about.
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Many of my students make the same mistake as you.
 
Despite Jim getting the FX strength/weakness mixed up, I agree that it's best to monitor the fluctuations and make the exchange when you deem the rate favourable, presuming you don't need immediate use of the funds.

I bought a significant amount of GBP last year when it was at 90p/€1 on the basis that the rate was relatively good. It's been 85-87p more or less since so it was the right decision.
 
ATC110 said:
I bought a significant amount of GBP last year when it was at 90p/€1 on the basis that the rate was relatively good. It's been 85-87p more or less since so it was the right decision.
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Ex-post rationalisation. What if the rate was 95p now?

As I said, sterling took a dive in 2008 and it's never recovered. You'd be waiting a long time if you were trying to time the market right.
 
My partner still has a sterling account so we get the UK pension paid in there. We still sometimes need to pay for things in sterling, it can be useful to have it there. Once or twice a year, when the exchange rate looks less awful, we bring over a chunk to BoI, typically 10k via Currency Solutions. Not sure we save more than a few pints of Guinness, but it works for us.
 
NoRegretsCoyote said:
Ex-post rationalisation. What if the rate was 95p now?

As I said, sterling took a dive in 2008 and it's never recovered. You'd be waiting a long time if you were trying to time the market right.
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I didn’t say the rate wouldn’t increase-I’m not a currency forecaster-but 95p would be highly unlikely.
I took a calculated risk and if the rate had’ve increased, so be it
 
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