The plummeting pound and soaring shekel can be a problem for olim - opinion

The rate of exchange is a major factor for olim in deciding what finances to transfer to Israel and what to leave behind.

 THOSE WHO rely solely on their British pension (and pensions from other countries such as the US, for example, to a lesser degree) for their income have been even more severely affected.  (photo credit: YOSSI ZAMIR/FLASH90)
THOSE WHO rely solely on their British pension (and pensions from other countries such as the US, for example, to a lesser degree) for their income have been even more severely affected.
(photo credit: YOSSI ZAMIR/FLASH90)

For many, making aliyah in later life is the fulfillment of a lifelong dream. The ability to live in the homeland of the Jews is something about which our forefathers could only dream.

Now it’s a reality.

Those who come here lock, stock and barrel, leaving nothing behind, are able to forge new lives, free of the headaches of exchange rates, transfer fees and the like. They only have the eyewater-welling-up high cost of living to contend with, same as the rest of us.

For many others, however, this is simply not possible. The older you are, the more difficult the whole aliyah process can be. Leaving behind a lengthy career, a home, a car or two and – if you’re lucky enough – a pot of savings, brings its own complications.

First, decisions about what stays and what comes with you have to be made. Should the proceedings from the sale of a house be transferred immediately to your new Israeli bank account, for example, or should you bring just enough for “the time being” and see how it goes?

The rate of exchange is the deciding factor for most people.

British pounds (credit: RAWPIXEL)British pounds (credit: RAWPIXEL)

When we made aliyah six and a half years ago, it was almost five and a half shekels to the pound. Since then, the pound has plummeted while the shekel has gone from strength to strength. Today, for example, the rate stands at 3.93 shekels to the pound. When we arrived what would have cost us £1 now costs us approximately £1.50.

Those who rely solely on their British pension (and pensions from other countries such as the United States, for example, to a lesser degree) for their income have been even more severely affected.

Simon, for example, who came to live in Israel in 2008 – when the rate was over eight shekels to the pound – was able to live comfortably on his small UK pension. The money he received was, in his own words, “enough for a single old guy to manage, not wealthily but sufficiently, including rent, food and a quiet social life.”

“Today’s exchange rate leaves me constantly worried that the landlords would increase the rent beyond my financial capability and have me once again searching for cheaper accommodation,” he continued.

High cost of living

LIKE SO many in his position, he is constantly on the lookout for more affordable places to live. His dwindling income, coupled with increases in rent has seen him move from the center of Tel Aviv, where he started out, to Ramat Gan and latterly to Petah Tikva – where he now lives. He is under no illusions, however, that he’ll be able to remain there in the long term and is already on the lookout for cheaper accommodation within reach of his family.

Israeli/British certified financial planner, Rifka Lebowitz CFP® and founder of the Facebook group, Living Financially Smarter In Israel, advises clients on how to make it here. Born in Scotland where she lived until the age of 12 when she moved here with her family, Lebowitz knows how it feels to be an immigrant.

“I’m passionate about helping English speakers understand their finances, feel comfortable with their money and succeed financially – in Israel.” she says.

When I asked her how people living on dwindling pensions could improve their situation, her advice, which applies to all immigrants, not just Brits, was as follows;

“My advice in general has always been to understand that when you are living in two currencies (NIS for spending and GBP for income) you have a currency risk and must budget below your means so that you have a buffer for situations like this.

"The reality is for some people this makes things tight and they need to be very aware of their financial situation and make necessary investment or budget or income changes to adapt.”

Rifka Lebowitz

One of her suggestions for those retirees who are still able and would like to work, is to start a side business, utilizing their skills in order to make up the shortfall.

Not wishing to be at the mercy of the financial markets, many retirees do just this.

“A positive attitude, a support system, which is readily available here, both go a long way to help find the right job, side gig or whatever else – things to fill in the gap,” Lebowitz says.

Sadly, however, for many here in Israel – even those who have never lived anywhere else – the cost of living and financial struggles are simply too much to bear.

What will happen to the British pension?

NOT A day goes by when Louise doesn’t think about her British pension, “at the moment I am too frightened to look how much it is disappearing.” she told me.

She supplements her income with a part-time job and is just about managing. The thing which grieves her the most, however, is the dichotomy which exists between her children’s standard of living. One of her children made the decision to leave Israel due to the high cost of living; he was struggling to make ends meet. He now lives “very well” in the US with his family.

His brother on the other hand, who remained in Israel and is now working as a doctor on a relatively good salary, is unable to get his foot on the property ladder. It is very likely that he, too, will leave the country in search of a more financially rewarding and easier life elsewhere, something which saddens Louise enormously.

Then there are those who think about leaving Israel for a better life, free from financial worries and constraints, but know that, for one reason or another, this will never happen.

Danielle, a Brit who has spent all of her adult life in Israel told me how difficult things have become in recent times for her and her family. Like Simon (above), she, her husband and their four small children have already moved to a cheaper apartment. Not only is it extremely stressful for them as they both have full-time jobs, but it’s also very unsettling for the children, having to adapt to another city. Buying a place of their own is simply out of the question, especially now as their only savings are in the UK.

Danielle told me that she is very keen to ensure that her children know all about budgeting and saving, something which she also feels ought to be taught in schools. In the meantime, however, she and her husband are simply trying to keep their heads above water and maybe save a bit now and then for old age. Her biggest fear is that they will become a burden to their children as they get older if they don’t have enough money put aside to supplement their pensions.

Despite all the difficulties, Danielle still loves Israel, “I love this country, I love the people, I feel at home here and I know our struggles are shared by many so at least we’re not alone.”

I’m certain she speaks for many here.

The bottom line is this; in the words of Anton Delin, a Brit with vast experience in the money markets who now lives in Israel, “we are living in a country with the world’s strongest currency and while that’s hurting BIG time those who survive on a [pound] sterling income, it should actually be a source of pride, the fact that the world recognizes what’s going on over here.”

Some names have been changed in the article.

The writer is a former lawyer from Manchester, England. She now lives in Netanya, where she spends most of her time writing and enjoying her new life in Israel.