Leaving the UK for an exciting new life overseas? Whether you’re planning to stay away for good or just escaping the British winter, getting your finances in order is key to a successful start in a new country.
Things to consider include:
Income – will your income be in pounds or local money, and what taxes will you have to pay?
Banking – which is the best local bank for you?
Healthcare – do you want to come back to the UK if you need treatment?
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Some expats are paid in the local currency, while others have to bring cash across from the UK. Both have pros and cons.
Being paid in the local currency seems simple, but can have tax implications. You may, for example, be taxed in both the UK and the country you are living in – meaning you have to make a double-taxation claim, which can be complicated and leave you out of pocket. You could even lose out if the local currency loses value against the pound.
If you receive your income in pounds, however, you’ll need to think about how to change it into money you can use locally.
Withdrawing money using a UK debit card is not a good option long term. Charges can add 5% or more to the cost, and exchange rates offered by banks are often poor.
Savvy expats will often use specialist money transfer services to bring cash from their UK accounts to their local ones. These companies can generally offer lower charges and better rates, as well as services designed to make you less vulnerable to currency fluctuations.
Choosing a local bank account is one of the most important financial decisions you’ll make when moving abroad. You might be able to open an account with a UK bank where they have branches overseas. But you should research all the options before making your choice.
Things to check when choosing a local bank account include:
If you want a UK credit card for overseas usage, it’s important to choose one that offers fee-free spending. You should also try to avoid withdrawing cash using a credit card, and clearing the balance in full each month will help you to escape interest charges.
Healthcare costs – and standards – vary widely around the world. You’ll need to pay for doctor consultations in most countries around the world, and the cost for the most straightforward check-ups might surprise you. Especially if you’re used to receiving free treatment under the NHS in the UK.
If you’re relocating abroad for work, your employer may offer you international health insurance as part of your overseas package. But for those without employee benefits, setting up a personal policy can prove to be a very sensible move.
Things to check when choosing expat health insurance include whether the provider will settle hospital claims on your behalf, or if you’re expected to pay and claim. You should also consider if the plan you’re choosing will cover the cost of emergency medical transport should you need it.
Money management might not be the most exciting part of relocating to a new country, but it is one of the most important. By taking a little time to consider your options before you go, you could be saving yourself time, effort and money when you arrive.
So what are you waiting for? The sooner you can tick these things off your to do list, the sooner you can start enjoying your new home.
The information in this article is correct at the time of publishing.