Tuesday, 29 September 2009

The effects of the global credit crisis on expats

The global financial crisis has affected most people on a day to day level. One could say that there are differences for expatriates, who may be more used to making adjustments to their life and spending than people who have lived in one place for their entire life. It could be argued that expats are either more or less likely to make big changes to their lifestyle, than native residents of a country, as the financial pressures increase.

Many expats live their life to the max and may have had to tone down on the luxuries in light of a less certain financial future.

On the other hand, having previously moved country, and then had to adjust to a new currency, income, pricing structure, and lifestyle, a small financial squeeze may not be much of an issue for many!

Another consideration is that different countries have been hit harder and expatriates often have the sort of international outlook that may further affect these decisions.

Our Expat Economics survey looked at the views and of those surveyed, expats living in Qatar and Saudi Arabia were the least likely to cut down on luxuries in light of the crisis, while expats in Canada were the most likely to exercise restraint.

Interestingly, over half of expats in Qatar and Saudi Arabia (as well as India and Russia) are actually saving and investing more now than they did before the onset of the financial crisis. This suggests that the luxuries in these countries are simply more affordable, and expats can continue to splash out while still having money left over to help secure their long-term financial health! So if you fancy a taste of the high life, at a lower cost, might it be time to look further afield?

Wednesday, 23 September 2009

How to be a savvy saver abroad

The 2009 Expat Explorer report has found that foreign expats living and working in the UK are the worst savers and investors globally, with more than a quarter (27% - the highest recorded in the survey) admitting that they have reduced their savings and investments since moving to the UK.

Overall, expats really take advantage of the financial benefits of living away from home, increasing the amount of money allocated to savings and investments on a monthly basis. On average, 72% of British expats are saving more than when they were living in the UK.

Expats continue to be sophisticated investors - almost half continue to invest in shares (46%), more than half (53%) are committed to putting their money in property, while managed funds (42%) and bonds (15%) continue to be popular.

Historically, savings accounts are the most popular way to save for expats across virtually all markets, with the exceptions of Mexico, Malaysia, Japan and South Africa. UK savings are backed by the government up to £50,000, but this assurance doesn’t cover their savings held in overseas institutions, so it wouldn’t surprise me if a significant amount of expat cash returns to the UK. And given Jersey’s new status as the number one offshore financial centre, as rated by the IMF (article), it wouldn’t surprise me if we see that money sooner rather than later.

Thursday, 10 September 2009

Offshore offspring - do they miss out on a childhood?

Charles Bremner recently wrote an article for the Times stating that expats kids miss that sense of belonging, that sense of patriotism one acquires if you’re born and live in the same country all your life. But is that really true, or has he just seen this in his own kids once they’ve flown the nest? The blog comments seem to disagree, but it must be difficult for children to be uprooted every three years or so? Having to immerse themselves in new social groups, new cultures, and new lifestyles – especially in your teenage years.

HBIB’s recent expat survey revealed that the expat community is even more diverse than ever before. It also revealed that there’s a growing number of expats with kids, and its these kids, like James’ that are often the number one priority for expats when moving abroad. The report revealed that having children as an expat poses some difficult questions, not least over how minimise their education interruptions. But some believe that because their children have grown up in a variety of different places (on average up to three different countries), they grow up to be more well-rounded, world-savvy individuals.

The full report – Offshore Offspring – will be out later in 2009, where we’ll be revealing what some of the expats from around the world think about bringing up children in different countries. We’ll be revealing the pros and cons and discovering where its best to be if you’re worried about your kids in when living and working abroad. For those of who are expat parents with kids, do you have any insights or even if you were a child brought up abroad - what is life like for you now? We’d be interested to hear your views

Wednesday, 9 September 2009

Are economics a decisive factor?

Our recent Expat Explorer survey looked at where was best for expat finances. The UK scored down the ladder here and also was one of the countries to have the highest percentage of expat residents that were considering a move home.

There has been further news recently on France and Germany emerging from recession (link). What influence does the relatively grim economic news have for expats in this country? As our guest blogger Lo reflected below, we have observed from our surveys that there is far more that makes a popular expat destination than just how expat finances fare there.

Many people do choose a location for the financial benefit they get there, often meaning that they can afford a better lifestyle. As ‘international’ people, expats are well placed to value the qualities of the place in which they live. This is why, despite the shifting economic outlook, most expats appear to know how to make the most of where they live, and are making small adjustments to their spending and/or saving to weather the downturn rather than considering relocation.

Although the UK may be slower to emerge from the recession than some of its neighbours over the channel, there are increasingly more signs of recovery here too. Chances are that if you’ve weathered it this far, news of a longer downturn in the UK than in Europe wouldn’t be enough to make you go continental!

Look out for our next survey instalment – Expat Existence – which looks more closely at some of these other factors that affect expat lifestyle.

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