8 currency tips for moving abroad in 2017
So, you’re thinking of moving abroad? While this can be an exciting time, you will need to carry out a lot of planning and consider a whole host of practicalities before this dream can become a reality. Finances and money will play a huge part in the feasibility and long-term success of a move abroad and should be given due thought. To help you on your way, we’ve put together 8 top tips related to money and foreign currency to consider before a relocation.
1) Budget and living costs
Firstly, you should carry out some comprehensive budgeting and financial planning to see whether, realistically, you will be able to afford the relocation. Different countries and cities can fluctuate a lot in terms of living costs and you may find your income does or does not stretch as far as it currently does in the UK. As well as accounting for initial costs such as accommodation, the travel there and hiring a moving company, look into local costs and try to calculate total monthly expenses. Costs can include rent, transport, food, entertainment, insurance, utilities and healthcare.
2) Savings
As well as ensuring you will have the money to cover living costs, you should have access to savings which can act as an emergency cushion if needs be. Rarely does such a big upheaval go entirely to plan and having some money to fall back on can help you deal with any unfortunate mishaps. Before you move abroad, you should aim to have around 8 months worth of living costs saved to provide you with some breathing space and security whilst you get settled.
3) Bank account setup
You should try to set up a bank account in your new country before your arrival. This can help simplify other tasks like obtaining a credit card and mobile phone, cashing pay cheques or paying for necessities when you first arrive. Note that this won’t always be possible before you move as some countries have stricter regulations than others. At least try to collate the necessary documents and sort out as much paperwork as you can beforehand to ensure you can open an account as quickly as possible, and avoid as many exchange and transfer fees as you can, when you do relocate.
4) Exchange rates
When converting your GBP to your new country’s currency, you will want to pay close attention to exchange rates. Especially when converting large amounts of money, even small differences in rates can translate to a big difference in amount of new currency you get for your money. With the current drop in the value of Sterling due to Brexit, it is all the more important to find the best rate. Shop around to get a feel for average rates and try to convert money when there is a favourable exchange rate fluctuation.
5) Consider a currency broker
Many people will convert their money through their bank as it is a safe and easy choice. However, banks rarely give the best exchange rates and there are usually hidden fees involved too. A currency broker will often give rates around 4% better than a typical bank and can provide a quicker and cheaper transfer service – useful for ongoing payments to or from the UK. To ensure your money is in trustworthy, reputable hands, make sure your currency broker of choice is authorised by – not just registered with – the FCA.
6) Guarantee your rate
Currency exchange rates fluctuate all the time and this can be a problem if you need to make solid plans and commitments abroad. A way around this is with a forward exchange contract. This lets you fix an exchange rate for regular payments over a long period of time – usually around 2 years – letting you calculate and budget precise amounts of money easier and avoid unexpectedly coming up short. This can be useful for things such as paying installments or mortgages for properties abroad or converting/moving pension payments or rental income from the UK.
By locking down a particular exchange rate, you are protected from future unfavourable exchange rates. This could be a particularly attractive prospect at present with Sterling likely to undergo a lot of fluctuation as Brexit negotiations continue.
7) Overseas money transfers
However you decide to transfer money, make sure you set up any transfer properly. It’s all too easy for stressful delays or lost payments to occur purely due to input errors or incomplete information. Generally for payments transfers you will need the full name, address, account number, sort code, IBAN and BIC numbers of your recipient/alternate account.
8) Tax
Tax can be a complex business but it is important you know your responsibilities when you move abroad. You should look into tax regulations in your new country of residence to ensure you understand your obligations and that you will still have an adequate income post-tax. It can be worthwhile seeking some professional advice to ensure you’re aware of all you need to know and make sure you don’t end up making mistakes or paying taxes twice! If you’re planning a permanent move, you should always inform HMRC before you leave.
If you are planning a move abroad, Britannia Sandersteads can help facilitate a smooth relocation. Our professional removals service can cater for moves across the world and we will always ensure your belongings are transported to your new home with the utmost care. From our base, we are ideally placed to help customers across London, Croydon, Surrey, Kingston-Upon-Thames and Epsom. Contact our friendly team today with any enquiries – we’re more than happy to help.
For any of your foreign currency exchange needs, we recommend Melissa Redcliffe (020 3005 8896), a Key Partnerships Manager for private clients at IFX who offers expert guidance and a reliable, dedicated personal service. As specialists with a worldwide reach, you can rest assured you are receiving a quality service and informed guidance with IFX.