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BRITONS IN SPAIN

‘We’ll have to cut back’: How Britons in Spain are hit by drop in value of pound

We asked our British readers to explain how the steep drop in the value of the pound will affect their lives in Spain. Here’s what they had to say. 

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The overwhelming response from Britons in Spain was that the drop in value of the pound will have a negative impact on the lives of UK nationals in Spain, although to varying degrees. (Photo by Justin TALLIS / AFP)

The British pound experienced a record 37-year low against the dollar on Monday, following on from a months-long fall in its value.

UK markets remain highly volatile, with the Bank of England intervening on Wednesday to buy government bonds in order to prevent a “material risk” to stability.

A slide in the value of the sterling could increase energy costs and the price of goods and services imported into the UK, as well as result in higher repayments for some mortgages.

That’s in the UK, but how about for Britons living in Spain? On Wednesday we asked our readers to tell us how they’ve already been affected and what they expect the ongoing impact of a weak pound will be on their lives unless the currency bounces back.  

We received answers to our survey from all corners of Spain, from Alicante to Almería, the Canaries to the Balearics and Malaga to Galicia. 

The overwhelming response was that the drop in value of the pound will have a negative impact on the lives of UK nationals in Spain, although to varying degrees.  

Numerous readers said it would “significantly affect” their standards of living in Spain, that “money is tight” already and that overall, it would make “life a lot more challenging”.

Most respondents referred to what it means for them in terms of receiving a salary, a pension, some form of UK income or even having savings in a UK account which they transfer over, the major negative being when it comes to the unfavourable exchange rate.

“I receive my pension (state and private) in pounds, but spend it wholly in euros. Of course, it’s made life more difficult,” one reader in the Asturian village of Mier in northern Spain told The Local.

“Having quit the UK permanently due to Brexit, managed to negotiate residency, health, driving and all the other bureaucracy in a foreign language, we’ve sold our house in the UK and need to transfer the money across. It goes without saying that this will cost us thousands in exchange rates. God, I absolutely loathe those ‘f……g’ Tories!”

Another Briton in Almería (Andalusia) said: “My husband and I both have UK pensions on which we rely to live. We are worse off this month by over €100 at a time of rampant inflation.”

“We will need to cut back somewhere,” a reader in Alicante acknowledged. “All my pension income is in sterling and the recent drop has caused a substantial reduction in the value in euros.”  

Another reader said: “We receive our income in pounds and transfer funds when the exchange rate is favourable. Obviously, not at the moment!”

On another expats in Spain group on Facebook, one Briton commented on what the weak pound meant in terms of large purchases: “We were going to buy a motorhome for €72,000. Exchange rate a week ago was £60,000, now €72,000 is £64,800. So, no motorhome at the moment. I feel sorry for these people who have bought property at hundreds of thousands and have to transfer money from the UK.”

On the other hand, some readers responded to our survey by saying that the pound’s drop would have “little impact” on their lives or that it would “just mean spending a little less”.

“I get less than 10 percent of my income from the UK while my expenditure is in euros. The fall in the value of sterling is annoying rather than lifestyle-threatening. On the other hand, trips back to the UK will feel cheaper,” one reader argued.

“I have a lump sum to live off with a pension due in three years. I became aware of the pound falling dramatically just over a month ago, so I used my wife’s bank account to change my currency into US dollars,” another Briton in Spain explained.

“I’ve actually made quite a bit of money so I’m happy with that. Hopefully a change of government in two years’ time, (if Truss lasts that long) will help reverse the pound’s fortune and all will be well for my pension.”

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MONEY

What to do with a damaged bank note in Spain?

Bank notes are fairly durable, but they can get wet or torn and become too damaged for others to accept them, so what can you do about it?

What to do with a damaged bank note in Spain?

Bank notes are difficult to tear unless you deliberately do so, but sometimes they can get wet and rip or so damaged that you can no longer see all the images. In this case, you’ll find that some shops may not accept them in that condition.

Euro notes have special characteristics so that they resist the passage of time. They are made with 100 percent cotton fibres and small bills, which are the most common, are coated with a special varnish, which also protects them from dirt or deterioration.

Even though paying with card has become a lot more popular in recent years, particularly during the pandemic, according to the Bank of Spain, cash is still the most widely used payment method, especially for small purchases. 

The report ‘Studies on habits with cash 2022′, published in October of 2022, and carried out by market research company Ipsos, confirms that cash is still the means of payment that is used most frequently.  

This is followed by cards, then mobile devices or apps. The report explains that cash is a universal means of payment and is used by almost the entire Spanish population since three out of five people use it on a daily basis.

READ ALSO: Is Spain going cashless?

With cash still so popular, it’s inevitable that at some point one of your notes will get damaged, so it’s important to know what to do when that happens.

So what can you do about it? Are you just down €20 or is there some way you can exchange it?

The Bank of Spain has advised on the steps you need to take if your banknote is damaged.

Firstly, you can present your damaged banknote at any branch of the Bank of Spain or any national central bank in the Eurozone and they should exchange it for you.

Banks should accept the damaged note whether more than half of the note has been destroyed or less than half.

READ ALSO – EXPLAINED: What are Spain’s rules and limits on cash payments?

What if my banknote has anti-theft marks on it?

Anti-theft marks are usually ink stains that have been left on a note because they were stolen from an ATM machine.

The Bank of Spain warns that if you suspect a note has been marked in this way and was stolen, then you should not accept it if someone is trying to pay you with it or give you it as change. You can simply ask for it to be exchanged for another.

When will banks not accept my damaged note?

If your note does have the ink-stained anti-theft mark on it, then Spain’s Banknote Analysis Unit warns that the Bank of Spain will not exchange it. Therefore, it’s very important that you don’t accept these in the first place.

The Bank of Spain will also not exchange any notes that have been intentionally damaged or defaced, so you can’t deliberately go around drawing on your bank notes or ripping them and then expect them to be changed.

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