Keeping Track of the Market: Currency Q&A

Q. We are thinking of retiring to France at the end of the year, but our UK pension would still be paid in pounds in the UK and we will rely on it for living expenses. What is the most efficient way to transfer the pension to our French account?

A. If you like to have some certainty so you can plan ahead, you can fix the rate of exchange on your monthly payments for up to two years. This will protect the value of your pension payments against market fluctuations, plus knowing how much you will receive in euros every time will give you some peace of mind.

In addition, you can even automate your payments with a regular plan that works like an international Direct Debit, collecting funds from the UK, converting them to euros and depositing them into your account on a weekly or monthly basis as you wish.

If you have more flexibility, you can decide to accrue your payments and exchange them at a good time with the help of your dealer at Moneycorp, or yourself via our online platform.

Q. We have found a property to buy in France, and after paying the deposit we are waiting for completion in a couple of months. We’re hopeful the pound might get stronger against the euro, but are concerned the market might move in the other direction. We don’t want to lose our chance to exchange the funds at a higher rate, but don’t want to be exposed to a potential drop.

A. The time between the purchase contract and completion is always an open field. The couple of months that separate both points can pose a risk and an opportunity for your budget, and deciding the best thing to do is not easy. The decision will depend on the market and your personal circumstances.

If you are sure the rate is going to improve, you can try to target an improved rate via a market order. This allows you to set up an automated payment conditional to that rate. If your target is achieved, we will automatically buy your euros at the agreed rate.

However, there is a risk that the market might take a downturn. To protect yourself, you can set up a stop loss order. By agreeing a rate below which you cannot afford to exchange your funds, the order will be executed before the market drops to that level, protecting the value of your transaction. Discuss both options with your dealer when you open your account.

Q. We have just sold our property in France and want to repatriate the funds to the UK, but are happy to wait until the rate is right. The funds are currently in our French bank. We want to close the account, but are concerned that if we do, we would need to exchange the money into sterling as we will lose our capacity to hold euros as we don’t have a euro account in the UK. Can you help with this?

A. With a Moneycorp account, you would be able to hold euros until you are ready to exchange them. There is no rush to book a rate, so you can discuss the best strategy with your personal dealer, or alternatively you can set up a currency exchange rate alert. This means that we will notify you via email or SMS letting you know when a currency reaches the desired level you set. With an exchange rate alert, you can take advantage of any upturns in the market, without needing to constantly check the moving rate.

Moneycorp holds a local account in France and your dealer would be able to share all the correct details and unique reference to instruct your French bank.

In each issue of French Property News we ask the experts your questions, and it’s filled with advice from property professionals including estate agents, lawyers and tax advisors.

The unique mix of legal, financial and tax advice along with inspiring in-depth location guides, inspiring real life stories, the best properties on the market, entertaining regular pages and the latest property news and market reports makes it a must-buy publication for anyone serious about buying and owning a property in France.