Last update01:19:34 PM

Back You are here: Home Legal and Finance Finance Greek Island Expats: Pound and Euro

Greek Island Expats: Pound and Euro

Those who have already bought property and are living on the Greek Islands are now having to adopt a whole new mindset when it comes to the plummet of the British pound against the euro. Although the exchange rate of the British Pound to euro has improved a little since the end of 2008, the erosion of sterling and the dollar means less spending power for expats who are reliant on funds from back home.

Property prices on the Greek Islands haven't gone up and the cost of living has barely altered - but what has changed is the amount of euros to be had for your pound. How are expats on the islands coping with this change in fortunes?

Whilst there appears a mass exodus of British pensioners from France and Spain, the expats on the Greek Islands seem to bearing up very well.

Pat Walker who lives on Corfu and is retired says "We used to go out to dinner two or three times a week but can't now. We have to be careful with our spending and where we shop. We certainly can't afford to buy any of the British foods we like any more". Pat and his wife moved from Newcastle to Corfu five years ago because they wanted to live in a warmer climate. Their only income is their British state pension. "The value of my pension has really gone down, by about a third, all because of the pound. There are some Britons thinking of going back but we're not. We love it here and still reckon we are much better off even though it is hard to make ends meet at the moment".

Mr and Mrs Bates, aged 56 and 55, from Islington in London and now based on Crete, told us "Don't get me going on the exchange rate. We've never known it this bad and have had to supplement our income which is coming from the UK with other work here. I'm working in a bar of an evening and my husband is growing fruit and veg to sell locally. It's tough. Any ideas of luxury items like a holiday are being put on hold. But it will change and the pound will improve, we just have to wait it out".

The weakness of the pound has affected them as it has thousands of others. Until recently the property boom in Britain launched prices endlessly upwards. This lead many to use the equity in their homes to buy second property on the Greek Islands or even move there. Now that the bubble has well and truly burst in the UK, the usually well-performing British pound has been sunk. Some of those who moved to the islands are finding it hard to maintain their dream lifestyle.

On the island of Santorini, Bob Watson, 48 is managing to cope. He runs a small bar which caters for locals and expats. Bob decided to leave British shores and escape the rat-race life in the UK. "Violence, break-ins, the nanny state... it's a real mess back there". He left for the Greek Islands to ensure his family had a better life and they are managing to make a living. "Last year was quite good. This year is only a bit down so far but I'm wondering what the smoking ban will do to my business, more than worrying about the pound. Fortunately, I don't just rely on the expats as they are all tightening their belts. We get a lot of tourists who are coming from other parts of the euro zone all through the summer months, so for them nothing has changed and they spend more than the Brits. Life here is wonderful, just what we thought it would be and we're tons better off in Santorini than we would ever be in England. We've been lucky, not much affected by the credit crunch".

There seem to be very few who are looking to sell up and move back. Even if they do, they can afford to sell their homes at a low price. In the short term, sellers are benefitting with the exchange rate being in their favour and are quids in. Changing the euro price achieved back to sterling can mean an extra 25% even with a reduction on the price of the property.

Martha and Ian Black found they could not cope with the 27% drop in the pound as they were living on Crete on a basic British state pension. "We used to get 1.5 euros to the pound but when it went down to nearly 1 euro to 1 pound, we stuck it out for a while but couldn't manage in the end. We sold the house, which took a long time, and although we had to cut the price a lot, we still made some profit when we converted the euros back to pounds. Mind you we'd rather still be in Elounda than back here".

Top five tips
- when exchanging money and bringing it from outside the eurozone, check with specialist currency brokers. They often offer better rates and sometimes even do transfers with no commission
- allowances from the UK. Make sure you claim all allowances to which you are entitled from the UK, such as winter fuel allowance
- local allowances. Investigate any local allowance in your new country for residents, particularly those over retirement age
- save money by shopping like the locals, forget the imported foods and goods
- grow your own. If possible, grow your own fruit and veg just like the locals do. It will not only save money but tastes great too