According to analysis by Prudential, retired British expats who choose to live in the eurozone have seen their annual pension income rise by €661.24 (£526) to €7,344.44 (£5,831), compared to £5,305 last year.
Just over a quarter of the increase can be attributed to a rise in the basic state pension from £110.15 to £113.10 a week in April 2014, the bulk of the gain is a result of the British currency gaining ground against its eurozone counterpart.
The pound was worth €1.25 at June end compared with €1.17 the same time last year.
The value of the pound in relation to the euro is now back at the level last seen in November 2012 and substantially higher than the low of €1.14 experienced in March 2013.
Paul Fidell, investment expert at Prudential, said: “The relative strength of the pound means that expat pensioners have effectively benefited from a pay rise over the last year. However, if they are totally or heavily reliant on the state pension, it is important not to fall into the trap of overestimating its buying power.
“Anyone considering retiring abroad should also be aware of the risks to their income by currency fluctuations and an unfamiliar tax regime.