4 July 2008
Mr Anderson had just retired to live in France and was receiving a monthly UK pension of £1,500. He decided to fix the exchange rate for the next 12 months starting in November 2005.
World First fixed exchange rate: 1.4850.
He set up a free standing order with his bank that enabled him to pay World First £1,500 every month. After receiving his funds, World First transferred €2,227.5 to his French bank account.
In this instance the financial benefits can be broken up into 3 areas:
| Date | World First Fixed Rate | Sterling Debited | Euros Received from WF | World First Prevailing Exchange Rate | Euros Received (Prevailing Rate) | Extra € Recived |
|---|---|---|---|---|---|---|
| Nov '05 | 1.4850 | £1,500 | € 2,227.5 | 1.4850 | € 2,227.5 | € 0.00 |
| Dec '05 | 1.4850 | £1,500 | € 2,227.5 | 1.4810 | € 2,221.5 | € 6.00 |
| Jan '06 | 1.4850 | £1,500 | € 2,227.5 | 1.4620 | € 2,193.0 | € 34.50 |
| Feb '06 | 1.4850 | £1,500 | € 2,227.5 | 1.4573 | € 2,186.0 | € 41.55 |
| Mar '06 | 1.4850 | £1,500 | € 2,227.5 | 1.4653 | € 2,198.0 | € 29.55 |
| Apr '06 | 1.4850 | £1,500 | € 2,227.5 | 1.4447 | € 2,167.1 | € 60.45 |
| May '06 | 1.4850 | £1,500 | € 2,227.5 | 1.4520 | € 2,178.0 | € 49.50 |
| Jun '06 | 1.4850 | £1,500 | € 2,227.5 | 1.4617 | € 2,192.6 | € 34.95 |
| Jul '06 | 1.4850 | £1,500 | € 2,227.5 | 1.4621 | € 2,193.2 | € 34.35 |
| Aug '06 | 1.4850 | £1,500 | € 2,227.5 | 1.4782 | € 2,217.3 | € 10.20 |
| Sept '06 | 1.4850 | £1,500 | € 2,227.5 | 1.4894 | € 2,234.1 | -€ 6.60 |
| Oct '06 | 1.4850 | £1,500 | € 2,227.5 | 1.4929 | € 2,239.4 | -€ 11.85 |
| TOTALS | £18,000 | € 26,730 | € 26,447.4 | € 282.60 |
The figures above show that most months he saved money by fixing the rate in advance but some months he lost out. There is no way of predicting accurately which is the better way but many clients prefer the certainty of knowing the rate is fixed in advance.
