When you think of Brits abroad, you think of burnt bits, sandals and socks, a need for tea and complaining about the hot weather. But one in ten Brits has left the UK for good, choosing to fully embrace a completely new life and culture. Deciding to live overseas is such a big decision to make, and really exciting, but with the novelty of a different climate and a new way of life come some important financial considerations.If you’re thinking about leaving the UK, read our checklist, and see if you’re still up for it once you know what’s involved.
Can you afford it?
A fresh start abroad may seem like a dream idea, but if you can’t afford it, it could make your new life pretty miserable. Think of all the things you’ll need when you get there, like a car or new furniture to fill an empty house with. Consider extra costs that you don’t already pay, like health insurance. Will the cost of living be higher? Will you need to come back to visit? It all adds up.
Your UK bank
Let your bank know you’re leaving the UK, but consider keeping your account open. It may be useful to have a place where you can continue to access your money here, especially if you’re leaving any financial obligations behind. You might need to continue with mortgage payments if you’re keeping your home and/or renting it out. If you can, pay off outstanding loans and credit cards before you go; it’ll make life easier when managing your finances.
Your new foreign bank account
Try and set this up three months ahead of your big move, and transfer some funds ready for you to access as soon as you arrive. There may be expenses you forgot about. There always are! Do your research, and go with a bank that’s big, reputable and safe, with plenty of branches in the country you’re moving to. It will give you peace of mind knowing that your money’s in good hands, and comforting to know you can deal with a real person, rather than struggling with the language barrier (if there is one) online or over the phone.
The exchanges rates can fluctuate pretty dramatically, so when transferring money into a different currency, you’ll want to make sure you can get the best possible rate, especially when dealing with large amounts. Seek advice from a foreign exchange company, like World First, who will give you a better rate than your bank. You can transfer money with a spot contract (the best available rate at that moment) or a forward contract (fixing the rate in advance, so if it moves against you, you won’t suffer). While an international current account allows you to run two current accounts at the same time and make transfers between them for no fee, the rates are likely to be less attractive than what you’ll get from a foreign exchange broker, so you’re better off using a company like World First.
Pensions / retiring abroad
If you have a personal or stakeholder pension here in the UK, be sure to advise your pension provider of your new circumstances. You can continue to contribute to it for up to five years while working abroad. After this, consider building up savings offshore, almost as a ‘second pension plan’.
You can claim your pension wherever you live. The money can be paid into a UK bank or directly into an overseas account in the local currency. Private pensions can be transferred from a home account to a foreign bank, and by using a foreign exchange broker you’ll tend to get a better rate, and save on fees.