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How can the pensions sector help overseas members navigate cost of living?

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6 June 2023

Written by
Neil Middleton

Key Account Director at Ebury Mass Payments

Global macroeconomic and geopolitical challenges have recently kept businesses on their toes. To stay ahead, there is an increased need to accelerate the review of their operational processes and drive efficiencies that meet rapidly changing customer needs and expectations.

This is especially important in the pensions industry. A renewed focus on value for money and customer experience is helping international members receive best-in-class service for their monthly overseas pension or lump sum payments. However, the industry must also help its overseas members mitigate the impact of the cost of living crisis to ensure they get the best value for their retirement benefits.

An overlooked process

Globally-located scheme members – that is, pensioners who reside outside of the UK or home country – total approximately 600,000 or ~2% of the UK’s pension population. However, this small and often overlooked group equates to approximately £3.6 billion worth of overseas pension payments per year. International payments are often misunderstood due to a lack of transparency and information, which is needed to highlight the true value members are receiving.

Challenges faced by pensioners overseas

Similarly to those residing within the UK, overseas pensioners on fixed incomes (such as annuities) are under increasing pressure from the cost of living crisis. Being confronted by high inflation* leading to sustained increases in general costs, and fluctuations in the value of the pound (which had a steep decline in late 2022, though has since rallied), these headwinds have caused expat pensioners’ retirement incomes to decrease year-on-year in real terms compared to their counterparts who live in the UK.
*10.1% and 8.7% in March and April 2023 respectively according to CPI data in the UK, and 7% globally based on the IMF’s World Economic Outlook April 2023.

The method of payment used to transfer funds from the UK to scheme members’ accounts overseas, along with the FX margin applied, ultimately determines the value of pension payment received. Payments sent via SWIFT, for example, can incur additional fees. This means that pensioners often do not receive their money on time and in full.

Lifting the lid on international payments - Download

Unlocking value

There are 3 key ways in which pension schemes and administrators can help mitigate the impact of these external factors to ensure that overseas pensioners get the best value for their retirement benefits:

  • Review existing operational processes – Deliver more to members by minimising fees and bank deductions (e.g. by using local payment schemes wherever possible). Ensure that you understand the FX margin applied to overseas members’ payments and the time they take to credit the account. Also, use the right technology or partners to process payments to future-proof the process.
  • Educate scheme members – Ensure that scheme members understand the potential financial impacts of retiring abroad, particularly the costs associated with international payments (fees, deductions, etc.) and what this can mean for their resulting income.
  • Focus on efficiency improvements – For example, by carrying out upfront verification for bank account details before payments are made, it minimises the risk of delayed or missed payments. The speed of adding new beneficiaries can also be improved by keying them directly onto a payment platform. Integrating APIs offers seamless processing without the need for manual payment files, delivering greater eAdmin automation and control.


💡 Ebury Mass Payments supports Pension Administrators, Trustees and S151 Officers to deliver a best-in-class payment service, resolving the challenges of processing domestic & global payments by focusing on consistently delivering value and service to Global Scheme Members. We work collaboratively and share insight and expertise with our clients to help them deliver more to members in times of rising budgetary pressures. To speak with an expert, get in touch.

The information provided herein is general in nature and should not be construed as financial or investment advice. The information provided here is not legally binding. The information, data or views expressed here is for the exclusive use of the recipient and is subject to changes without any notice. You may ask the support team or your dedicated relationship manager to provide additional information regarding Ebury products.