In the past few months, poor foreign exchange rates have made life particularly difficult for expats living abroad, but more recent figures show sterling has strengthened against the pound.
This has provided some relief for Britons, particularly those living in European countries that use the euro.
Marc Cogliatti, currency strategist at HiFX, said that the outlook is fairly positive for the pound.
"Things are pretty encouraging and overall, that will continue to allow the pound to appreciate against the vast majority of its counterparts," he stated.
Mr Cogliatti explained that in the past few months, analysts reckoned that the UK is in a much better place to recover from the recession than many countries on the continent.
"Our authorities in this country have been a lot more proactive than the European countries with regards to pumping money into the system, pumping interest rates very quickly and providing physical stimulus – trying to do something to provide the economy," he continued.
Nevertheless, the relationship between the euro and sterling is at a "key crossroads", Mr Cogliatti added.
Staying put
Earlier this month, gross domestic product figures published by Eurostat, the Statistical Office for the European Communities, showed that France and Germany have both come out of recession.
David Kuo, director of financial advice service The Motley Fool, said that expats are advised not to make a rash decision about whether to remain living abroad or move back to the UK.
"Choosing to retire abroad is a long-term commitment," he insisted.
"It’s best not to base the decision on betting which country is likely to emerge from recession first," he added.
Despite reports of expats coming home, Mr Kuo suggested that relocation overseas remains preferable to some Britons.
"For some people, selling up and moving abroad is still an option given that UK house prices are still higher than in other countries," he added.
Offshore savings
Those who decide to take the plunge and move abroad, or are already overseas and want to make the most of their savings, should consider opening an offshore account, according to Mr Kuo.
He said there remains a risk for people who earn money in one country while spending their cash in another.
"The pound has risen from near parity with the euro to 1.15 euro, but it is still 15 per cent below the value it was this time last year," he explained.
"Betting on currency movements is a mugs game," insists Mr Kuo. "So rather than keeping your money in sterling, open a foreign currency account."
"The interest rates may not be as high as you may get in a sterling savings account, but at least you won’t lie awake at night fretting over exchange rate movements," Mr Kuo.
Halifax International offers various options for expats wanting to open an international bank account, such as the Euro Variable Rate Web Saver, which offers up to 1.45 per cent annual gross annual equivalent rate. For more information on how to manage your money while living abroad, visit the Halifax International website.
Mr Kuo also suggests that Brits go for one of the larger UK financial institutions that have an international banking presence, such as Halifax, as this also makes things much easier.
If you are unaware of the options open to you when it comes to offshore finance, Halifax International also offers advice for expats on its website, with a section devoted to busting the myths of offshore banking .
Written by Chris Moore
