Expats leaving UK

News

Wednesday, 01 July 2009 16:14

Almost half of UK expats may leave

Forty-four percent of UK-based expats are contemplating leaving the country, a survey by HSBC Holdings Plc indicates.

The main reasons cited by the 3,100 respondents were rising living expenses and the recession.

“Worldwide, 74% of respondents claim to have increased disposable income since becoming expats, yet this figure falls to just 47% of expats in the UK,” HSBC said in a statement. “The U.K. remains one of the most expensive places for expats to live - and the recession has taken its toll.”

Britain’s worst economic downturn since the 1930s has already resulted in higher unemployment. Combined with sterling’s 17% drop against the dollar in the 12 months this has curbed the value of expats’ UK earnings. Business failures will rise to a record level this year, according to a separate report issued by BDO Stoy Hayward LLP.

The Organisation for Economic Cooperation and Development (OECD) claims that the UK recession will be worse than originally forecast. It predicts a 4.3% contraction in 2009, compared with a forecast in March of 3.7%.

HSBC said the largest proportion of expats earning more than $250,000 a year live in Russia, with a total of 30%, followed by Hong Kong at 27% and Japan at 26%. A fifth of the survey respondents in the U.K. earn $60,000 a year or less. The report indicates three-quarters of expats in Britain have reduced their expenditure because of the economic crisis.

Asian countries are the cheapest in terms of accommodation, HSBC said. Fifty percent of expats in Malaysia, 49% in China and 43% in India said that the cost of housing is significantly lower than in their home country.

The UK was the second most expensive for food, with Switzerland claiming top place in this category, HSBC said. Seventy-eight percent of U.K.-based expats said that transport was more expensive than in their native country.

Almost 100 companies will fail every day during 2009 in the UK, BDO Stoy Hayward said. This will bring the total to 36,200 for the year. The number will reach 40,400 in 2010 because the various stimulus measures, including the record low interest rates, will not begin to take effect until another two years.

“Business failures in Great Britain are rising unabated as the fallout of the economic downturn becomes ever clearer,” said Shay Bannon, head of business restructuring at BDO Stoy Hayward, “Consumer spending is set for a steep contraction in 2009 and households will continue to be hit by rising unemployment, weaker earnings growth and reduced perceived wealth levels.”

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