The UK pound continues to drop against the Thai baht and at time of writing it is floating around the 42 baht to the UK pound.
It was not long ago that Brits enjoyed a healthy 70 baht to the pound if you go back 8 or 9 years ago, but since then things have gone from bad to worse.
According to pensionbee.com the average UK pension is £403 a week, this drops to £369 after tax. At todays price that is 62,000 baht a month, back when it was 70 baht to the pound retirees would have had 103,320 baht per month so the drop in income has been huge. In fact I would go as far to say that it has been devastating.
Many Retirees say 40 baht to the Pound is their breaking point, but is it?
Many retired expats comment on forums like Thaivisa.com that the breaking point for them is 40 baht to the pound, which if that is the case means we could see many British expats soon up sticks and leave Thailand. But, would they? What we don’t know is how sticky Thailand as a retiree destination is and there are other factors at play that I discuss later. I would suspect a fall any further will not attract more retirees but for those already here maybe home is still home whatever their budget.
For curiosity I wanted to run a scenario at a 38 baht to the UK pound and crunch some numbers around that point. To me it looks fairly tight. The lowest UK pensions come from the North East of England where they get on average, after tax, £269 a week. So let’s say £1,069 a month which is 45,000 baht to live on in Thailand.
In a recent Thaivisa survey it was reported that 75% of expats own a car, 1 in 2 a house and 1 in 5 a condo, but I want to focus on those already feeling the pinch and whom do not own anything which is still a sizable share.
With a 45k baht a budget you have fixed costs from a cheap condo rental which could be as low as 7k baht a month and then a bike rental at 3k baht a month. You are already down almost 25% of your monthly income.
Next take electricity and water which could be as low as 1k baht in this case. You would hope they have health insurance and that would set them back at least 7k baht a month based on their age. That 45k baht a month is already down to 27k baht.
Add a wife and kids into the mix and it gets even tighter
What if they have a dependent wife or kids? Again in another recent Thaivisa survey 87% of expats said they have at least one dependent child living with them in Thailand and 36% have two or more. The family alone must cost a good 10k baht a month and that is on a tight budget.
This leaves 17k baht a month for the retired expat for food, drink, clothes and any leisure spend. It can be done, for sure, but it does not sound like much fun to me. Any ideas of a holiday would be mere fantasy and I cannot help but think after all those hard years of working to finally get to retirement and be left on a such a tight budget is not ‘living the dream’ but merely existing. I feel for these guys.
Financially impossible for many retired expats with family to leave Thailand
I suspect if the pound dropped to 38 baht to the pound it would have an impact on the retirees being attracted to Thailand, like I said already, but would just add more misery to those already here that are largely trapped by the financial impossibility of upping sticks. And remember 87% have at least one child living with them meaning they would have to move their Thai family too, and on such a budget this would be impossible.
I suspect it would be a disaster for them on many levels. You still have to get a new retirement visa each year, this could lead to lots of struggling retiree expats on overstays that would effectively go into hiding.
If there are any ‘sick buffaloes’ out there then, I am sorry to say, they can forget about any money for help too…
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