Moving to a new country can be an exciting adventure, but it also comes with its fair share of challenges. I experienced this first-hand when I moved here 16 years ago from Africa.
One of the most important aspects to consider when settling into a new life in the UK is understanding and navigating its financial system.
Whether you're here for work, study, or to start a new chapter in your life, mastering the basics of finances in the UK is crucial for your financial well-being.
Here's my introductory guide to help you navigate the UK financial landscape based on my own experiences of moving to the UK and starting a new life.
I hope it can help to make your transition that little bit easier!
Before you leave home: -
Build up your savings ready for the move.
However, the money you think will be enough, won't be - double it.
The UK government guide on coming over with a Tier 5/Youth Mobility visa (a live/work visa for under-30-year-olds) suggests you'll need a minimum of £2,530 in savings.
But there are so many things you wouldn't imagine you'd need, and the extra stability and security will help when everything is new and changing.
My recommendation is to bring whatever amount you need to make a substantial change to the game plan.
For example, you may get here and suddenly discover you aren't able to find jobs in the field you want to work in. Or you may fall in love with a beautiful foreigner and want to study a foreign language instead.
Even if you have secured a job in advance, it's not a bad idea to plan for a change.
In addition, your first few months will be fun (plus a few moments when you'll want to pull your hair out) so consider a small budget to treat yourself, too.
You'll also want to have drinks with new housemates, catch up with old friends who live here, and explore your new surroundings.
My advice is to sit down and prepare a budget, think of every eventuality, and make sure there is something put aside for contingencies. Not everything will go to plan. More of this later.
Have an address – your first accommodation sorted.
This is critical. It'll be pretty much impossible to get or plan anything without first knowing where you'll be staying.
Whether it's an Airbnb a friend's place or a flat you rent, you need an address to apply for everything, from SIM cards to bank accounts.
I rented a place in advance on a six-month lease. But looking back, I would have been better off staying in temporary accommodation and taking the time to suss out locations, and transport, and to figure out what's value for money in the UK. (Hint: set the bar low if you're coming to London).
If you do choose to get permanent accommodation in advance, rental agencies will typically want either proof of income and savings or else ask you to pay three-to-six months upfront and/or to have a guarantor, such as a family member, who will cover you financially and legally if you fall short.
Once you know where you're staying, help yourself out by choosing to pick up your BRP card (proof of legal immigration status) at a Post Office nearby.
After you've arrived in Britain: -
Understanding the Currency and Banking System
Familiarise Yourself with the Currency:
The currency used in the UK is the British Pound Sterling (£). Get acquainted with the various denominations of notes and coins to avoid confusion during transactions.
Open a UK Bank Account:
Having a UK bank account is essential for managing your finances efficiently. Research different banks and their account options to find one that suits your needs. Many banks offer specific accounts tailored for immigrants or students.
You should check out your banking options.
If you can begin to sort out a bank account in advance, why not?
In the UK, there are retail banks that have physical branches across the UK, and mobile banks where you will only interact via a mobile app.
You can research different current account options via a variety of internet sources, including Which, Money Saving Expert, and USwitch.
Mobile banks and apps such as Monzo, WISE, Starling, and Revolut are popular for their ease of use, low cost, and efficiency, although some people still value the reputation of traditional banks such as Barclays or Lloyds.
Note that signing up for a mobile bank is done via the bank's app. Ironically, when you try to download this app via Apple's App Store, Apple ID might ask you for a local credit card to proceed.
I found myself in this 'hilarious' endless loop circumstance where in the end I had to use a housemate's card details to download the mobile bank's app – to get my local card!
Whichever bank you pick, keep in mind you will go through some kind of application process where the bank will want to verify your identity.
I suggest giving it a go before your move. However, if they need to see your BRP, you will have to wait until you arrive in the UK!
Some banks will only open a new account with you in person at a branch. If this is you, book your appointment in advance for when you arrive, after you pick up your BRP card.
This was a surprise for me. In Australia, I was used to being able to walk in and see someone immediately. In the UK, appointments for new accounts can be booked up for weeks in advance, especially in busy periods.
You can research savings accounts using the same services I listed earlier.
Savings accounts tend to require less rigour in their identity checks, so you could very well open one from abroad, provided you have your UK address.
Keep in mind the interest rates for savings accounts in the UK are currently quite low.
Documentation Required
When opening a bank account, you'll typically need to provide proof of identity (such as a passport or national ID card) and proof of address (utility bills, rental agreement, etc.). Make sure you have these documents ready.
Once you've set up your bank account, you can use low-cost transfer agencies such as Wise to send money internationally to the UK.
Typically, you'll be asked to make a local transfer to a Wise intermediary bank based in your home 'from' country (Australia in my case), and then be paid from Wise into your new bank account in the UK.
Transfers can happen in a matter of 1-2 days, but I'd plan for one week.
My 3 tips for ‘Budgeting’ and ‘Managing Finances’
1. Create a Budget:
Develop a monthly budget outlining your income and expenses. Be realistic and factor in essentials like rent, groceries, transportation, and utilities, as well as discretionary spending.
2. Understand Taxes:
Familiarise yourself with the UK tax system, including income tax rates, National Insurance contributions, and any applicable tax allowances or deductions. You may need to register for a National Insurance number if you plan to work in the UK.
3. Save for the Future:
Consider setting aside a portion of your income for savings and investments. Explore options such as Individual Savings Accounts (ISAs) for tax-efficient savings or pension schemes for retirement planning.
Accessing Financial Services
1. Credit History and Scores:
Building a good credit history is important in the UK for accessing credit cards, loans, or mortgages in the future. Startby using a UK bank account responsibly and consider obtaining a credit card with a low credit limit to establish credit.
Set up your credit profile for success.
You'll need some time to build up a credit profile in the UK.
There are three main credit agencies in the UK – Equifax, Experian, and TransUnion.
The following services are free and will enable you to check your credit profile across the various agencies: Credit Club (Experian), ClearScore (Experian), and Credit Karma (Equifax & TransUnion).
MoneySavingExpert has a good guide on building your credit profile in the UK.
Sign up on the electoral roll.
Try to minimise the number of credit applications and hard searches on your profile (which can be tough at first when setting up utilities, mobile phone accounts, and so on.)
If you have been offered credit, keep your credit utilisation low (between 1-20%) and make all minimum payments or pay your card off monthly, in full.
Take out a credit builder card if you need extra help, such as Aqua.
Monevator has a legacy guide to the best credit cards that covers what to look for – but needs updating on the specifics. (Hint hint!)
2. Insurance:
Depending on your circumstances, you may need various types of insurance, such as health insurance, renter's insurance, or car insurance. Shop around to find the best deals and coverage options. Money Saving Expert has some useful insurance Guides HERE.
3. Seek Financial Advice:
Don't hesitate to seek advice from financial experts or organisations specialising in immigrant services. They can guide you on various financial matters and help you make informed decisions. Money Advisor has a good guide for finding a decent Financial Advisor - you can read it HERE.
4. Stay Informed:
Keep yourself updated on financial news, regulations, and changes in the UK. Understanding the local financial landscape will empower you to make sound financial choices.
4. Be aware
Beware of financial scams and fraudulent activities. Exercise caution when sharing personal or financial information, and always verify the legitimacy of any offers or requests. WHICH have compiled a list of the latest scams doing the rounds this year - you can check them out HERE
6. Embrace Financial Literacy:
Invest time in educating yourself about financial literacy. There are plenty of resources available online, including budgeting tools, educational websites, and community workshops.
Moving to a new country can be daunting, but with the right knowledge and preparation, you can navigate the UK financial system with confidence. By understanding the currency, banking services, budgeting techniques, and access to financial resources, you'll be well-equipped to manage your finances and thrive in your new home.
7. Learn about pension and investment options in the UK
To have a pension in the UK, you'll need a National Insurance (NI) number, which may have been given to you automatically with the BRP.
If not, don't fret. You can apply for an NI number online and visit a centre once you're in the UK. You can apply for a NI number HERE
There are both workplace and private pensions (for the self-employed and others) available. Check out one of the many online guides for more info.
As for selecting investment platforms and brokers, peruse Monevator's comprehensive guide.
The UK offers tax-efficient wrappers called Individual Savings Accounts (ISAs) to encourage you to save tax-free. Note that there are strict annual allowances on how much you can put into your ISAs each year.
Can you transfer your pension to the UK? How will your investments be affected?
How will moving affect your existing pension and investments?
Arrangements between different countries and the UK will differ, so check specific sources for your country.
When in doubt, please seek out an expert financial advisor.
For pensions, if your current country partakes in the Qualified Recognised Overseas Pension Scheme (QROPS), you can potentially look at using QROPS to consolidate your pensions into one plan.
As for your investments, it'll help to learn about the UK's tax laws. Expatica has a useful guide to start you off.
Here are some resources I have found invaluable on my arrival in the UK
Do your homework - there are lots of good resources and useful articles out there.
Here are some useful organisations who might also be able to help - my advice is to check out their website.
UK Visas and Immigration (Gov.UK) - is the official Government website that provides essential information about visas and immigration processes, which are directly relevant to immigrants.
The Money Advice Service offers comprehensive guides on managing money in the UK, including setting up bank accounts and understanding the financial system.
Citizens Advice advice provides practical, reliable advice, including how to deal with financial difficulties and understanding UK banking and finance laws.
The Citizens British Banking Association offers you insights into UK banking practices and advice on choosing the right bank, including services for immigrants.
The Expat Network provides useful articles and guides about living and working in the UK, tailored for expats, which include financial advice and tips for settling in.
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There are also some useful ‘checklists’ out there for preparing to move to the UK - this is a good one which summarises the main areas of consideration. Read HERE
My Final Word - Embrace open-mindedness and a growth mindset
Now that we've got you prepared financially for your new life in the UK, it's time to enjoy it.
While exciting, coming to a new culture can be tough, so it's important to stay open-minded and curious about learning about the UK.
Be sure to speak up for yourself, network, and share your background and culture with love. Nurture your 'growth mindset'.
Personal finance for immigrants is all part of our adventure.
Surprises, twists, and turns will come your way, so stay present in the journey and trust your ability to adapt.
After all, you're learning and growing.
Oh, and welcome to the UK!
You might be interested in reading my latest BOOK. Thriving Beyond Borders is a book that can help you see money differently and gain control over your finances. Whether you're new to managing money, struggling with financial difficulties, adjusting to a new lifestyle, living paycheck to paycheck, or just looking for a fresh perspective on financial management, this book is a fun and informative guide to improving your financial situation. You can BUY a copy on Amazon or HERE.
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