The booming economy may have been attracting emigrants back in recent years, but long before they were coming home many elderly Britons and Europeans knew Ireland was a good place to retire to. In the case of many people from Britain, there may have been some family connection behind their decision to move here. But the principal motivation was usually financial: up to recently housing outside Dublin was reasonably priced compared to the popular British retirement destinations and non-pension retirement benefits such as free bus and train passes, free television licence and free utility (electricity, gas and telephone) allowances are considered very generous here. The cost of living was generally considered to be lower compared to parts of Britain, such as London and the home counties. Though not entirely free and under financial pressure, the medical service here is also considered to be of a very high standard, with private medical insurance (for those who meet the age qualifications) reasonably priced. Living off a British pension, however, would be a little like living on a financial rollercoaster, with some pretty wild ups and downs against the pound in recent years. Up to now this has been a real advantage, with sterling worth up to 17 per cent more than the pound at one stage in the past year.

Ms P from Co Clare, a British national retired here, is nevertheless concerned about what will happen to her income next year when the euro comes into force. "Are UK pensions likely to decrease in value and is anything being done by the European Commission/Parliament to help people caught like me? There are so many of us."

With EMU, an Irish pensioner living in another EMU state like France, Italy or Spain, for example, will no longer have to worry about currency fluctuations or the cost of exchange transactions, since the new rate is locked at a set level and will not fluctuate within the euro club. But because sterling is outside the EMU, British pensioners will not enjoy the same currency stability: the value of their pensions will go up or down against the euro with sterling's value on any given day determined entirely by the Bank of England.

With no jurisdiction over the British pound, there is nothing the European Commission or Parliament can do to ease any adverse currency swings that sterling may suffer. Some analysts are suggesting that sterling may end up quite stable against the euro it is not in the interests of British business, any more than Irish business, to have great currency divergences but whether that means sterling will hover at a slightly higher, lower or equal rate against the euro is anyone's guess. The good news is that the British government has given a commitment that Britain will join EMU after 2002, the date when all the EMU member-states will have adopted the euro coins and notes and have dropped their own currencies for good. Until then, Ms P might want to consider having her current income and assets reviewed by a professional adviser who may be able to recommend higher yielding deposit or investment accounts to try and squeeze out a slightly better income or improve capital growth.