Exchange rates for direct pension transfers?

[Daft Doctor]

Hi, I just wondered how close to interbank rates do people get if they opt to have their state/NHS/other public sector pension paid directly to their French account in euros rather than in £'s to a UK account?  It might be an option for me if the rates are good.  Thanks for any insight.

[Debra]

1.22697 on 10/4/2012 if that's any help.

[NormanH]

I have my OAP transferred directly, but I don't see any information on the rate on anything I receive.

Did you calculate that Debra, or is the rate shown somewhere? I would be interested to see it if it is.

[cooperlola]

The rate the railway pension fund gets for me via their TAPS system (Citibank at the mo', RBS in the past) is consistently better than any of the banks or FX companies I've found for myself.  Sheer weight of numbers, I suspect.

[NormanH]

But where do you see the rate? Is it included on a statement with your transfer?  I could calculate mine as I know approximately how much I should get in sterling and see what enters my account, but never see the rate actually stated anywhere.

[Kong]

My state pension is paid directly into my French bank. I know what the sterling value is as it's fixed annualy and paid every 28 days. A simple matter to calculate the exchange rate with each payment and that rate always matches the published interbank rates. No way could I match that through any currency exchange organizations.

Kong

[parsnips]

[quote user="Daft Doctor"]Hi, I just wondered how close to interbank rates do people get if they opt to have their state/NHS/other public sector pension paid directly to their French account in euros rather than in £'s to a UK account?  It might be an option for me if the rates are good.  Thanks for any insight.[/quote]

Hi,

 The rate for the state pension is excellent and sometimes equal to the published interbank rate.  For other pensions it depends on the organisation ; for my fire pension it's usually about 2 cents below the spot rate.

[cooperlola]

[quote user="NormanH"]But where do you see the rate? Is it included on a statement with your transfer?  I could calculate mine as I know approximately how much I should get in sterling and see what enters my account, but never see the rate actually stated anywhere.
[/quote]I can't, Norman, I just have to compare it from time to time with the rates on the BdeF website for that day.

As an aside, it also makes the process of playing the annual exchange rate game very easy.  I just add up the number of euros I actually got.  Simple.

[Debra]

[quote user="NormanH"]I have my OAP transferred directly, but I don't see any information on the rate on anything I receive.

Did you calculate that Debra, or is the rate shown somewhere? I would be interested to see it if it is.

[/quote]No I don't see it somewhere I calculated it because I know the GBP amount exactly.  Its a military pension and the amount changes every month and I believe there is a small charge included to have it paid in France.  It's always a better rate than we could get from a bank or currency transfer company on the day.

[NormanH]

Thanks Debra. In any case it seems clear that the direct transfer is a good deal.

[Daft Doctor]

Thanks for the answers.  One reason I asked the question is that if I get the pension transferred in euros straight to my Axa account here if France it seems it would be enough to qualify me for a preferential credit card, reduced bank charges and a good interest rate on credit balances.  Seems from what's been said that the exchange rate might be good too, though seems no-one is around the forum who gets an NHS pension this way to give their experience.  I might try it to start with and if I'm not being short-changed on the exchange stick with it.  One sizeable disadvantage is not being able to choose when to transfer funds or buy forward contracts to make the most of favourable exchange rates, so I will need to weigh up the pros and cons.

[Araucaria]

My experience of trying to second-guess the market - by transferring money when I thought I was getting a good rate - was that I virtually always got it wrong. I now have a regular monthly standing order, and I win some and lose some, but it averages out in the long run.

My OH has her state pension paid directly to our French bank and it is a much better rate than I have ever been able to get, and no charges either. But as you say, no-one has posted experience of an NHS pension: but I don't see how their ability to negotiate a rate (and their bargaining position) could be worse than yours.

[parsnips]

Hi DD,

         I know people who have their pensions paid into UK banks and transfer "when the rate is right", but their problem is they are always watching the TV or computer for the current rate and are torn between transferring today, or waiting a bit till it gets even better.  Of course they frequently wait too long and the rate suddenly drops.  There is a danger that they become obsessed with exchange rates and it spoils their enjoyment of the laid -back life-style they came here for.

        From 19 years of having my fire service, and now my state pension, paid directly in euros, it's a case of swings and roundabouts; even sharp drops in the rate are eventually evened out by the indexing of the pensions to the high inflation of the £ caused by the effective devaluation.   Unless one can afford to wait a very long time before transferring funds , and not many people can, there is a very real danger of being forced, by urgent need of funds, to transfer at a very bad rate.

       It's similar to the argument in stock market investment between steady regular investment at set intervals (always recommended by the experts) and trying to time the markets to make occasional big investments -- sometimes rewarding, but over time at best only marginally more efficient, and sometimes disastrous.