Expat Community > Colombia

fecherklyn
Joined 2015
Posts: 1459

Whow, my fantastic pension.increases.

5 months ago

Whow, my fantastic pension increases.

On another Forum thread we were discussing how inflation factors can severely impact your financial situation over the longer term, especially in countries like Colombia where local cost of living generally increases at far faster rates than the ¨home country¨ pension payments. Mostly, expats residing in Colombia hope/expect this disequilibrium will be offset by movements in the relevant exchange rates, I,E. the US$ will trend higher against the Colombian Peso and compensate for the increasing COP cost of living. The problem is, the ¨offsetting¨ is not guaranteed….read on.

For other reasons I had to revisit my UK and EU pension payment over the last 8 years and found the following:

My EU Euro pensions had increased by 13.4% over the last 8 years.

My UK State Pensions had increased by zero percent, Yes, you read that right.

Clearly, the notion your pensions will be protected by corresponding increases in the annual upgrading based on official inflation rates is ………if I am polite ¨not very reliable¨. How much have European costs of living increased in the last 8 years, it is certainly somewhere in the stratosphere and I would imagine much the same happens in the US??

And then the Zero increase in UK State Pensions….Zero. Yes this is true IF YOU LIVE IN COUNTRIES THAT DO NOT HAVE A RECIPROCAL SOCIAL SECURITY AGREEMENT WITH THE UK…..and Colombia doesn´t. As I paid the same UK Social Security payments as all other UK residents, it looks a bit unfair doesn´t it and this has been confirmed by the EU and UK Supreme Courts who recognize it as a discriminative application by the UK and EU courts but stated governments need to have discriminative powers when, and if required. As a consequence, my UK State pension has remained frozen at the same level as in 2000 when I first arrived in Venezuela and Colombia.

All of the above to demonstrate your dream expatriation in Colombia may very well welcome you on arrival BUT over the long term this can change into reverse if all the factors do not play in your favour. Over the last two years, the offsetting role of the ¨weak¨ Colombian Peso has not been realized – hopefully this is soon to revert to normal?

William Russell

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William Russell

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Whow, my fantastic pension.increases.

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