Britons considering retiring to Israel are being warned that it is “no longer the cheap option”, after research showed that pensioners there are significantly worse off than a decade ago.
According to a report by Equiniti, a leading UK pension administrator, British expatriate pensioners around the world have up to 50 per cent less buying power in real terms than they did in 2003, due to the effects of inflation and a weakened pound on their savings.
Although those who packed their bags for Australia are worst off, British retirees who made aliyah have seen a 26 per cent fall in their buying power, due to a rise in living costs in Israel, and as exchange rates have moved in Israel’s favour from an average of 7.3 shekels to the pound in April 2003, to just 5.5 now.
“Israel is not the cheap option any more,” said investor manager Simon Benarroch, who advises potential emigrants to Israel for the Jewish Agency and Nefesh B’ Nefesh.
“Things have got more expensive in Israel and the pound has got weaker. The two combined mean life is more expensive.”
Retirees are certainly feeling the pinch. According to Norman Segall, who retired to Tel Aviv two years ago: “You notice it in everything, from buying a cup of coffee, to meals, going to theatres, the cost of transport, the cost of entertainment, and of course, the great one, the cost of housing.
“When I started looking at aliyah in 2007, the cost of living in Israel was probably significantly cheaper than living in London. It was a comfortably manageable option. It isn’t so comfortable now.”
Alice Krieger, who retired to Israel in 2006, said that had she known “what I do now”, she would never have sold her home in London. “Not only could I never buy it back, but the calculation I made of what I would need to live on in Israel was way off.”
She added: “The exchange rate is a killer — last week I got a rate of 4.8 shekels to the pound.
“I bring everything back that I possibly can from England, but it doesn’t help the fact that electricity, municipal taxes and gas are much higher here. The cost of food is also atrocious. In Tesco you can buy quite a lot of items for £20; I’d get nothing here for 100 shekels.”
Mr Benarroch said that the situation was worse for retirees from outside London, who were now getting less when they sold their homes.
“A few years ago you could sell in the UK and buy something in Netanya and invest the change. Now there is no change and you’re lucky if you can sell the house in the first place. In general people are left with a smaller pot from what they’ve sold their property for and from what they’re buying in Israel. It’s certainly harder than it used to be.”
He advised those considering aliyah to avoid leaving money in British banks, and instead invest it in an international portfolio in different currencies. “The exchange rate only makes a difference when you go on holiday, but these retirees are ‘on holiday’ the whole time,” he said.
However it is not all doom and gloom. “The thing that does tend to be cheaper in Israel is private healthcare,” added Mr Benarroch.
And new olim can take comfort in the fact that they would not be much better off if they had retired elsewhere.
UK pensioners living in the Eurozone have experienced an average 22 per cent fall in their buying power since 2003.
l One of Israel’s richest men, Idan Ofer, whose net worth is estimated at $6.5 billion, is reported to be relocating to London for family reasons. Mr Ofer’s mother, Aviva, already lives in London, and his son, who has recently finished his Israeli army service, may decide to study in the UK.
Mr Ofer, 57, is the controlling shareholder of Israel Corporation, which has interests in shippping and energy. He ranks 182 on the Forbes list of billionaires.