Last updated on August 28th, 2023 at 01:55 pm
If you’ve recently made the big move to the UK, chances are you’ll be juggling plenty of tasks 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.
Speaking of money, this is now also the time to ensure you get off to the best possible financial start in the UK. Read on for our quick insights on how to do exactly that.
Tip 1: Set Up a Local Bank Account
Opening your own bank account in the UK really makes it a lot easier to ease into your new life here. 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
To prove your address, a number of documents will be potentially acceptable, depending on the bank in question. Generally speaking, one of these should do the trick:
- 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
- A HMRC tax notification dated within a specified time period
- A tenancy agreement issued by a housing association, local council or solicitor
You’ll have plenty of banks to choose from in the UK. 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 will provide you with a debit card and current account you can use to set up your new life. You’ll want to check what the separate fees for various services are, and if there’s a handy mobile banking app available.
The good news is you’ll probably 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.
Tip 2: Understand How Tax Works
Tax can be a complicated subject to explore, especially in an unfamiliar country. So let’s break things down here to make it more easily digestible.
First up, there’s the matter of National Insurance (NI). This is the money you pay to contribute to the UK’s National Insurance Funds, which in turn provides 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 8am to 6pm.
If you’re employed in the UK, you’ll most likely pay your National Insurance 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 will depend on a few factors. First up, 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 will be taxed at the Basic rate up to a certain threshold. Any amount you earn over that threshold will be taxed at the Higher and Additional rates.
Personal Allowance and tax thresholds change frequently, but you can easily find out the current amounts online. Bear in mind that if you’re self-employed, you’ll have to report and pay your taxes yourself, through self-assessment.
Tip 3: Plan Your Budget
One crucial factor when living in a new country is how the general cost of living may be very different to 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 could include the following expenses:
- Rent or mortgage
- Utility bills, including the TV licence
- 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
Tip 4: Stay Aware of the Exchange Rate
If you’re intending to send money back to support family and friends in your native country, you’ll want to keep a close eye on the currency exchange rate. As the respective values of global currencies will 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 will currently equate to in your home country’s currency.
Tip 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 – you’ll want 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 be assured of low fees and a clear exchange rate whenever you transfer money from the UK.
Remitly is on a mission to make international money transfers faster, easier, more transparent, and more affordable. Since 2011, millions of people have used Remitly to send money with peace of mind. Visit the homepage, download our app, or check out our Help Center to get started.