Transferring your UK pension to a French bank account: Currency Q&A

How can I mitigate the volatility of the pound in these uncertain times?

I’m looking to buy a house in France on a fairly tight budget. What can I do to mitigate the volatility of the pound in these uncertain times?

It helps to understand the market, how the process of currency exchange works and what you’re likely to get for your money. A foreign exchange expert can provide guidance and help you set your budget. A specialist can also make you aware of any scheduled events in the short term that could substantially vary the rate. Once you know the situation, you can consider both the expected range of where the rate is most likely to be when you come to buy, and at what point you will feel comfortable within that range. With the guidance of an expert, you can use currency exchange tools to target the highest available rate within your range and protect yourself against any sudden drops in the value of the pound.

At which point should I speak to a currency broker?

Would you recommend finding a property first, then using a currency broker to sort out payments/deposit? Or would it be too late to organise money transfers by that point?

There is no time limit on how early you can speak to a currency broker, but it’s advisable to have an initial conversation before you start viewing properties. Knowing where the rate is and your options when it comes to buying your euros will help you to manage your property budget. Opening an account is free of cost and obligation, but if you find a property you want to buy, you can speak to your account manager straight away.

Setting an exchange rate

What should I know before setting an exchange rate?

As well as the current market conditions, it’s worth knowing about the tools available to manage your risk and protect against fluctuations in the rate of exchange. You can decide to lock in a prevailing exchange rate in advance of your payment using a forward contract. This tool is very useful for those who want to take advantage of favourable movements in the rate and want the peace of mind of knowing how much a property would cost them. Forward contracts don’t cost anything, but you may need to pay a deposit and should bear in mind that once the rate is fixed within your forward contract, you cannot change it – even if the exchange rate moves in your favour.

How can I transfer my UK pension to my French bank account?

What’s your advice regarding monthly pension transfers from the UK to a French account?

If you are moving permanently to France but your pension is paid in sterling in the UK, you can set up an automated direct debit to have your pension transferred monthly in euros to your account in France. This removes the need to contact your bank or order a transfer every time the funds are received. You could even fix the amount sent in sterling, the amount received in euros, or both, on every monthly transfer for up to 24 months. Fixing the rate will give you the certainty of knowing the exact value of your pension, regardless of the rate fluctuations.

Are currency transfers expensive?

How much do currency transfers cost to set up?

The cost of currency transfers varies greatly between providers. For instance, high street banks can charge as much as £40 for each transfer – and when you consider the various costs of buying a property including the deposit, eventual payment, legal fees and property taxes, those charges can soon mount up. It’s good to know then that French Entrée readers are charged no fees for all their international payments with Moneycorp.