Moving to the Continent - best strategy for transferring savings into Euros?

robskillz · 12 October 2016 at 6:06PM

Hi folks,

I'm planning to move to the Continent for about 10 years, moving within the next 6 months and I currently have all my savings in Pounds. I am wondering what the best tactic would be for transferring most of my savings from Pounds into Euros, to minimise losses due to the exchange rate fluctuation? Obviously with hindsight it would have been better to start this before the June referendum but here we are today.

About 50% of the savings will be used towards housing purchase after about a year of renting.

I was thinking of moving 50% to EUR now, and 25% later (in about 6 months?) to kind of hedge against fluctuations. Leaving 25% in pounds long-term.
Or would 37% / 37% be a better split?
Or a different tactic - only transfer 50% in total (in one or more stages) and leave 50% in GBP long-term.

Priorities are that it's low risk and minimising losses. I'm not a currency trader or speculator. Ultimately I'll be living/earning/spending/saving in Euroland for 10 years so it'll be a one-off move rather than keep moving savings between the two currencies to play the FX market.

Any tactical advice?

By the way, the interest rates on Eurozone savings accounts look even lower than they are in the UK!

atush · 13 October 2016 at 9:34AM

Use a currency specialist. Hedging is good- unless the pound falls further.

How long have you had this plan? If you knew back in June (or even as lates as Sept) you could have gotten much better rates? I say this as I knew I had to spend dollars and euros before the referendum, so stocked up on them back then.

andromedean · 13 October 2016 at 10:37AM

https://transferwise.com/ will give you a near zero spread exchange rate for a 0.5% fee. You could avoid fees and spread by spending 'abroad' using one of the specialist credit cards and paying it off in Sterling from your UK bank account. You would be subject to the exchange rate fluctuations in the meantime whilst you drain your account and if you have a lot of money that may take some time depending on your spending rate. See 2) here http://www.moneysavingexpert.com/travel/cheap-travel-money.

robskillz · 13 October 2016 at 12:03PM

Thanks for the replies. I'm more interested in when to move the savings and in how many stages over time, rather than the service to use for making each move.
Any ideas on strategy for this?

TCA · 13 October 2016 at 12:12PM

You'll be speculating no matter what you decide. If it was me I wouldn't be moving money for a house purchase until I was 100% sure I had something to buy.

missile · 13 October 2016 at 2:36PM

My best guess is £ will continue to fall against the € and it may never recover. In your situation I would transfer at least 50% asap.

You could hedge your bet with a forward purchase.

steampowered · 13 October 2016 at 2:53PM

Personally, I think it is a really bad time to be moving pounds into euros. In your situation I would keep my money in pounds for as long as possible as I don't think there is much further down to go and plenty scope for the pound to recover.

However, that is just my subjective opinion. None of us have a crystal ball. It is possible that I am completely wrong.

If you only have a limited amount of money, it might be sensible to go ahead and do the transfer. That way you are sure you will end up with enough Euros.

If you have enough money, then it is just a question of timing. I suppose you will have to choose some point during the next 6 months to do the conversion. You could do it 50% now and 50% in 6 months so that you are effectively averaging out any difference between and the rate in 6 months time.

robskillz · 13 October 2016 at 6:04PM

steampowered wrote: »

...If you have enough money, then it is just a question of timing. I suppose you will have to choose some point during the next 6 months to do the conversion. You could do it 50% now and 50% in 6 months so that you are effectively averaging out any difference between and the rate in 6 months time.

Good point about the averaging - thanks!

Moving to the Continent - best strategy for transferring savings into Euros?

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