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UK Expats Salt Away GBP150bn

by Phillip Morton, Investors

10 November 2008

Britain’s army of expats have saved a collective GBP150bn between them, according to the latest research from offshore savings bank, Alliance & Leicester International (ALIL).

The 5.5m British citizens who live around the globe have between them amassed far more wealth per household than those they have left behind, the study finds. While savers resident in Britain have salted away GBP820bn, equivalent to GBP31,300 per household, expat households have on average saved up GBP54,621.

According to ALIL’s survey, Australia is the top country for UK expats with 1.1m Brits living there. Across Europe there are 1.8m British expats, with Spain and France the most popular choices. A million live in North America, the majority in the USA.

However, the spread of wealth does not reflect the spread of expats. By far the wealthiest expats are the half a million in the Middle East, principally the oil rich Gulf. Of these, 28% have been seconded there to work, and on average they have saved up almost GBP125,000 per household. So even though only 10% of the UK’s expats live in the Gulf, they account for a quarter (24%) of expat savings, a massive GBP36bn between them. Those in North America are the second richest, with GBP70,000 per household. The least wealthy expats live in Central and South America, with just GBP26,000 per household.

Outside the Gulf, the richest expats can be found in the regional financial powerhouse of Singapore, each with GBP101,000, while the richest Brits in Europe enjoy the lifestyle of tax haven Monaco, with savings of GBP150,000.

The wealthiest expats are those who have been seconded abroad for work, on average worth over GBP100,000. A quarter of these also receive free accommodation from their firms. Those with the least savings are those who left the UK to find a job in a new country. These are typically younger workers seeking a new life and new adventures.

One in five (19%) of all expats use a UK offshore bank for their savings. A third of those using offshore UK banks have been seconded abroad by their firms and they are most likely to hold their savings in sterling. Almost three fifths (58%) of expats use local banking services, while almost two fifths (39%) use UK mainland banking services. Almost half (47%) do most of their banking over the internet.

One third (31%) of expat savings are in sterling, while 29% are in local currencies. The rest is split between US dollars and euros, with euros taking the larger share.

Simon Ripton, Joint Managing Director of Alliance & Leicester International said:

“Expats are far wealthier on average than their UK counterparts. Many who move abroad to work are either highly motivated young people determined to make a success, or established, senior workers on secondment. The concentrations of wealth demonstrate how strong the opportunities are in some parts of the world.

“The draw of the Gulf has become irresistible to many in recent years and UK expats there are clearly doing extremely well. With the lure of careers in financial markets likely to diminish over the next few years, we may see a further concentration of UK expats in the Middle East. By contrast, with the pound now much weaker against its main trading partners, retiring abroad will be a much more expensive option for British pensioners and may deter many from doing so.

“Making the right choices on banking services is especially important for those living overseas. Using offshore UK banks can allow for efficient tax planning while internet access ensures it’s quick and easy to manage finances from anywhere in the world.”

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