Has the gain in Spain gone down the drain?

With a copy of the Daily Mail on the cafe table, Eric Summers orders a white coffee for himself and a tonic water for wife Viola - in fluent Spanish.

A late-morning drink on the pavement cafes of Torrevieja has been a way of life since the couple moved to the Costa Blanca about nine years ago.

But in recent months, like many others, they have been more careful about watching the pennies, or at least the euro cents.

Eric and Viola are among the estimated 375,000 expatriates who have retired to Europe and seen the value of their UK pension plummet because of the soaring value of the euro.

Many state pensions, paid in sterling, are now worth between £50 and £80 less a month after the exchange rate sank earlier this year.

"You definitely notice it," says Eric, 78, folding his newspaper.

"This time last year my British pension got me 750 euros a month - now it's about 670 euros."