Moved to the UK? Here are five essential money-saving tips to help you settle in.
Written by Emma Lunn, a freelance journalist from London. Emma writes regularly for UK publications including The Guardian, The Daily Telegraph, The Mail on Sunday, Moneyweek and Moneywise.
Welcome to the UK – land of cups of tea, nice orderly queues, big red buses and awkward politeness. Make sure you’ve packed your umbrella and a sense of humour.
Sorting out your finances, both personal and business, in a new country can be tricky. You might find we do things differently here or use financial jargon you haven’t heard of.
To help get you settled, here are five financial tips to get you started with your new life in the UK.
1. Start building a credit score as soon as possible
Building up a credit history is vital for doing everything from opening a bank account to buying a house.
But even if you’ve got a super credit history in your home country, you’ll be starting from zero in the UK, as UK credit reference agencies only hold information on people with UK addresses.
So, the first thing you need to do is get a UK address. Once you have an address, make sure at least some of the household bills (for example, energy or broadband) are in your name, and add your name to the electoral roll if you’re eligible to vote. Being accepted for credit and managing it well will boost your score.
2. Consider an app-only bank account
The UK banking industry is dominated by big players such as HSBC, Santander, Royal Bank of Scotland, Barclays and Lloyds.
Many newcomers to the UK find themselves in a catch-22 when it comes to opening a bank (current) account. Many find to rent a home, they need a bank account, but they need proof of an address in order to open an account.
App-only banks can offer a handy solution. Monese and Starling Bank, for example, allow you to open an account on a smartphone without the need to prove your address.
Those that do open an account with one of the big banks often find they offer poor value if you need to send money overseas. You can save money with Transferwise which offers great rates and low fees. Businesses also have the option of opening a Transferwise borderless multi-currency account.
3. The cost of living
Living costs vary enormously across the UK. As a general rule, it’s cheaper to live in the north of England than the south (but it’s colder up north too, be warned). London is the most expensive price to live.
Travel costs can seem extortionate if you don’t plan ahead. A train ticket from London to Manchester can cost £20 if you buy it in advance but up to £300 if you just turn up on the day. On the plus side, you can often fly to Europe for about £20 too.
You’ll need a pay-as-you-go Oyster card to travel around London – but make sure you avoid eye contact with anyone on the London Underground (known as “the tube”). It’s strictly against established etiquette.
Emergency National Health Service (NHS) healthcare is free to British citizens and expats from countries which have reciprocal healthcare agreements including Australia, New Zealand and all EU member states (although this might change once Brexit is complete). In addition, anyone with “ordinarily resident status” in the UK is entitled to NHS services.
4. Household bills
If you rent a property, you’ll probably need to pay bills separately from your rent.
You’ll have no choice of water company, but you can shop around for competitive energy and telecoms deals.
The best tariffs are offered to customers who pay by “direct debit” (a recurring payment from your bank account). Having accounts in your name and paying your bills on time will improve your credit score.
It’s compulsory to have a TV licence if you have a TV or watch iPlayer. This costs £147 and you can be fined £1,000 for not having one.
It’s also mandatory to have at least third-party insurance for your car – and don’t forget, we drive on the left and road signs are in miles.
5. Paying tax
Tax laws for migrants and expats are notoriously complicated but, in general, if you work in the UK you’ll need to pay income tax to HMRC (Her Majesty’s Revenue and Customs).
If you’re employed by a company, tax and National Insurance (which pays for the NHS) will automatically be deducted from your salary each month according to your tax code.
If you consider getting a job in the UK use the take-home pay calculator to get your monthly or annual net salary after normal UK tax and National Insurance contributions. Get the calculator here.
If you’re self-employed, you’ll need to contact HMRC to register as a sole trader or company and file a tax return each year. Use the self-employed income tax calculator to work out your profit after tax, and what you need to pay in Income Tax and National Insurance.
You’ll also need to pay council tax for the property where you live (regardless of whether you’re a tenant or owner), and vehicle excise duty (VED, or “road tax”), if you own a car.
Send money internationally for less
Sending money to other countries often comes with high fees, especially if you use your bank.
One way to circumvent this is by using Wise. It’s quick to set up, the transfer is typically complete in a fraction of the time it takes with a bank, and it’s much cheaper.
Sign up for your free account and see how much you could save.
GlobalWebPay is not as expensive as traditional banks out there however, for some transfers, Wise might be able to save you more money.
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