British second-home owners with properties in France and Spain are pulling their cash out of the euro.
Foreign-exchange group HiFX said that the number of euro sellers and sterling buyers had increased by 155pc compared to the same time last year, while those who were forced to send money abroad were incurring charges by moving it in smaller amounts.
"People who have homes abroad tend to send around £15,000 over a year for general upkeep, paying for the pool man, taxes, et cetera," said Mark Bodega, director of HiFX.
He said that typically they would send all of this money over together, but at present most are choosing to move less than £3,000 at a time, even though they are incurring fees for sending smaller amounts. "People are choosing to keep their money in the UK," he said. "They are understandably worried that if the situation in Europe gets worse, the value of their euro holdings will plummet and, in the worst-case scenario, their banks may collapse and they may lose everything."
He counselled those who are worried about events to make sure they have their savings spread carefully, so that they are covered by the standard compensation limits in place throughout Europe should a bank default.
New EU laws have enforced a standard compensation limit of €100,000 per account that is covered in the event of bank failure. However, those with overseas accounts are likely to have to recover it from the country where the account is held, which may prove more difficult if that nation is in financial crisis.
Sterling hit an eight-month high against the euro at one point this week, as Italy's growing debt problems continued to weigh on the single currency.
Mr Bodega said he believed that most of those taking their savings out of Europe were concerned that the euro would weaken further on more bad news, and that their savings would be worth far less. However, he added that the constant drip-feed of news about French banks' exposure to the euro was also a factor in people's decision to pull their money out.
For those who do wish to transfer money back from their overseas bank accounts, it is important to get the best rates possible.
Sterling hit an eight-month high against the euro at one point this week, as Italy's growing debt problems continued to weigh on the single currency.
Mr Bodega said he believed that most of those taking their savings out of Europe were concerned that the euro would weaken further on more bad news, and that their savings would be worth far less. However, he added that the constant drip-feed of news about French banks' exposure to the euro was also a factor in people's decision to pull their money out.
For those who do wish to transfer money back from their overseas bank accounts, it is important to get the best rates possible.
No comments:
Post a Comment