A guide to personal finance for immigrants to the UK

This guide to personal finance for immigrants is by The Learner from Team Monevator. Come back every Monday for another fresh perspective.

A new adventure? Relocating for work? I recently moved to the UK, too, from Australia. That meant rebooting my financial life.

Moving country is a huge job and so I’ve prepared the following guide on personal finance for immigrants from my own experience of coming to the UK.

I hope it can help to make your transition that bit easier!

Before you leave home

1. Build up your savings ready for the move

However much money you think will be enough, 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 of 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 that live here, and to explore your new surroundings.

2. 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 or 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, 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.

3. 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:

Money Saving Expert

Mobile banks and apps such as Monzo, 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 – in order to get my own 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. 

4. Learn about pension and investment options in the UK

To have a pension in the UK, you’ll need to have 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.

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.

5. 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 to 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.

After you’ve arrived in Britain

6. Transfer funds into the UK

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 ‘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.

7. 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)

Credit Karma (Equifax & TransUnion)

MoneySavingExpert has a good guide on building your credit profile in the UK.

You’ll want to:

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!)

8. Embrace open-mindedness and a growth mindset

Now that we’ve got you prepped 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 own 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!

Further reader: Finances 101 for UK immigrants

Monevator has lots of non-native born readers, so please share your tips and experiences on personal finance for immigrants in the comments below. And do check back for more articles from The Learner.

The post A guide to personal finance for immigrants to the UK appeared first on Monevator.

Leave a Reply

Your email address will not be published. Required fields are marked *