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The pound is in a right state!

Let’s not pretend otherwise … and British expats living in Thailand are certainly feeling the pinch.

Where did it all go wrong?

Well, it’s a combination of factors. The Thai baht is incredibly strong at the moment.

Too strong, in the opinion of some. And the pound is the world’s second-worst performing currency according to the boss of the de Vere group.

He didn’t say which is the worst but, whatever, I’m not sure I will gain much consolation from knowing that another group of people are in a bigger pickle. I’m too busy thinking about the pound.

I’ve just looked up previous exchange rates between the baht and the pound and discovered that in 2005 (as far back as the chart went) you could get 74 baht to the pound. Now it’s hovering around the 37-38 mark. Half – what a disaster!

If you’re a youngish reader I’m aware that old so-and-so’s chuntering on about the good old days when you could get a bottle of beer for 50p can be a bit of a turn-off. But, just stop a minute and put yourself in their shoes.

Many older British expats almost certainly decided Thailand was the place for them to retire when their UK-based pension went a long way in the Land of Smiles.

With exchange rates of 70-odd baht to the quid. Now it goes just halfway.

It’s little wonder that I’m getting feedback from friends based in Thailand saying that they are either definitely returning to the UK or, at the very least, giving it some serious thought.

Who can afford to stay in the circumstances?

Not many, sadly.

Those receiving the UK state pension will have had it frozen once they receive it in Thailand. State pensions increase gradually for those based in the UK but even those increases would not keep pace with the decline in the pound abroad.

A good friend of mine tells me that he has read a prediction that the pound might drop as low at 27 to the baht.

For everyone’s sake – and very much including my own – I hope that’s wrong.

Regular readers will be aware that I’m back in the UK at present and have been for three years. I’d love to try to convince you that I saw this problem coming and got out ‘in time’.

But it would be BS.

I went back to the UK just before the Brexit vote and, money-wise, it has been pretty much downhill ever since that referendum.

Why do I care about the exchange rate?

Well, my Thai wife is here with me and she sends money home each month. It will come as no surprise to you that every now and then (more now than then) I get roped in to subsidise this family allowance.

Sending more and more money so Thai relatives still receive the same figure is turning into something of a trial. Suggestions that they get up of their arses and do something for themselves seem to fall on stony ground. Funny that!

Then, of course, there’s my cunning plan. That is to return to Thailand in three years’ time when I retire. If my UK-generated pension (a combination of private and state) is not cutting it in Thai terms I may have a difficult decision to make.

My house on the Dark Side will be paid for by then so I could live in Pattaya rent-free or continue to spend £575 a month in the UK for money-down-the-drain rent. At first sight, it’s a no-brainer.

However, the balance against this is that moving from the UK back to Thailand raises questions about the cost of healthcare (free in the UK) which is not to be dismissed lightly. And then there’s the exchange rate.

Of course, it would be good to earn some Thai baht should I return to shelter me from the exchange rate storm. I’m still working on that.

So, if there any light at the end of this particular tunnel? In the short-term I fear the answer is: Not a lot … as magician/comedian Paul Daniels used to say.

But, longer term (in about three years’ time, I hope)?

There is good and bad about having a strong currency. The Thais are finding themselves being undercut by other rice-producing nations when they look to export the commodity. And let’s not forget the impact on tourism. It’ not just the Brits who are finding their money does not go so far. If Thailand loses it’s cheap and cheerful tag (maybe it already has and maybe it wants to), then who will go visiting?

In the middle of July, the Bank of Thailand introduced measures to stop the baht strengthening further to try to fend off speculators snapping up the currency.

So, it’s possible, note I don’t say probable, that steps might be taken to reposition the baht.

Could the pound also gain in strength?

Yes, of course, that’s possible. Sorting this Brexit nonsense would help considerably. But, beware, there is every chance that an inability to resolve Brexit might force a general election which could serve to destabilise the currency even more in the short-term.

I saw a post of Facebook the other day about Brexit that struck a chord. It repeat it here but claim no credit (or otherwise) for its content. It said:

“I’m not saying that there wasn’t a democratic mandate for Brexit at the time. I’m just saying that if I narrowly decided to order fish at a restaurant that was known for chicken, but said it was happy to offer fish, and so far I’ve been waiting three hours, and two chefs who promised to cook the fish had quit, and the third one is promising to deliver the fish in the next five minutes whether it is cooked or not, or indeed still alive, and all the waiting staff have spent the past few hours arguing among themselves about whether I wanted battered cod, grilled salmon, jellied eels or dolphin kebabs, and large parts of the restaurant appeared to be on fire but no one was paying attention because they were all arguing about the fish, I would quite like, just once, to be asked if I definitely still wanted the fish.”

How you react to the above would depend on whether you wanted in or out.

Not the prettiest of pictures I’ve painted here. And please do not for one minute think I’m trying to encourage all Pattaya Brits to return to the UK. I’m not, I’m hoping that if I do make it back in a few years’ time there will still be friends there who have survived the financial upheaval.

To sum up, as the Labour Party tried to convince voters in 1997 I think that “things can only get better”.

Let’s be honest, they couldn’t get much worse. Or could they?

 

By Dave Buckley