5 Smart Finance Tips if You Just Moved to the UK

Last updated on December 30th, 2023 at 09:27 pm

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If you recently made the big move to the U.K., you may be juggling several asks right now. Your to-do list may include sorting out the bills at your new home, learning the ropes at your new job or place of study, and deciding on the best way to send money back to loved ones at home.  Here at Remitly, we gathered 5 smart finance tips if you just moved to the U.K.

1. Set up a local bank account

Opening your own bank account in the U.K. makes it easier to settle into your new life. You’ll need documents to prove your identity and your address, although some banks may only require proof of identity.

To prove your identity you can show any of the following:

  • Your passport
  • Your driving licence
  • Your EU identity card

You can potentially use various documents to prove your address, depending on the bank. Generally speaking, one of these documents may work:

  • A bank statement from another bank, dated within the last three months
  • A gas, water, or electricity bill, dated within the last three months
  • A council tax bill for the current year
  • An HMRC tax notification dated within a specified period 
  • A tenancy agreement issued by a housing association, local council, or solicitor

You have plenty of banks to choose from in the U.K. There are some big names, such as Barclays, HSBC, and NatWest, as well as the newer generation of online banks such as Monzo and Starling Bank. All provide you with a debit card and account you can use to set up your new life.

Determine the separate fees for various services and if there’s a mobile banking app available.

You may be able to open your account online, as long as you have electronic versions of your ID documents. If you prefer, you can also do it in person at a bank branch, in which case we’d recommend making an appointment first. 

2. Understand how tax works

Tax can be a complicated subject to explore, especially in an unfamiliar country. Let’s break things down to make it more easily digestible:

National Insurance (NI)

NI refers to the money you pay to contribute to the U.K.’s National Insurance Funds, which in turn provide social security benefits such as the State Pension and maternity allowance. You have to pay NI contributions if you’re over 16 and earn over a certain amount per week. 

You’ll need a National Insurance number to pay your contributions. To apply, just call the application line on 0800 141 2075, which is open Monday to Friday from 8 a.m. to 6p.m.

Income tax

If you’re employed in the U.K., you’ll most likely pay your NI and your income tax through the PAYE, or Pay As You Earn, system. This means the tax is automatically deducted from your pay packet, so you don’t have to worry about filling in any tax returns yourself.

How much you pay depends on a few factors.

First, there’s your Personal Allowance, which is the amount you’re allowed to earn tax-free. Once you put that to one side, you’re left with your taxable income. This gets taxed at the Basic rate up to a certain threshold. Any amount you earn over that threshold will get taxed at the Higher and Additional rates.

Personal Allowance and tax thresholds change frequently, but you can easily find out the current amounts online. Keep in mind that if you’re self-employed, you’ll have to report and pay your taxes yourself, through self-assessment.

3. Plan your budget

The general cost of living may be very different from what you’re used to. This is something you’ll naturally get used to as the weeks and months go by, but to begin with, it may be useful to draw up a budget plan. This may include the following expenses:

  • Rent or mortgage 
  • Utility bills, including the TV license
  • Home broadband and mobile phone bills
  • Weekly food shopping
  • Transport and fuel costs
  • Money for recreation, evenings out, and so on
  • Money set aside for tax, if you’re self-employed

4. Stay aware of the exchange rate

If you’re intending to send money back to support family and friends in your native country, keep a close eye on the currency exchange rate. As the respective values of global currencies rise and fall, the exchange rate is always shifting.

This means that the amount your loved ones receive will likely differ with every transfer, even if the amount you actually pay stays the same. Fortunately, it’s easy to check online to see what your payment in British pounds currently equates to in your home country’s currency. 

5. Find a cost-effective way to send money home

If you’re sending money home–whether as occasional gifts, business investments, or to support the people you care about—it’s important to have a service that’s fast, fair, and secure. Dedicated money transfer apps are increasingly popular as they tick all three of those boxes.

Here at Remitly, we handle remittances for millions of people who’ve moved abroad. By using our service, you can expect low fees and a clear exchange rate whenever you transfer money from the U.K.