Because we do take these facilities for granted, we perhaps assume that switching our bank account from one country to another should be a fairly straightforward process. While it is usually relatively hassle-free, that may not always be the case … and it’s worth remembering that the banking industry has never been averse to applying additional charges for all sorts of services and transactions.
Do you have to open a new bank account when you move abroad?
In some cases it may actually be possible to just keep using your UK bank account – particularly if you are moving to another country within Europe. The introduction of the Single Euro Payments Area (SEPA) means that it’s possible for those with a bank account in the Eurozone – as well as other EU member states, including the UK – to use banking facilities such as debit cards and Direct Debits in other SEPA countries without paying exorbitant cross-border fees. This means that, subject to your bank’s own service fees, it may be possible to continue using your UK account while living abroad. This option may be suitable, for example, for retired expats who have their pension paid into a UK account.
If you do need to open a foreign-currency bank account for living or working abroad, it may be worth checking with your own bank first. Many of the UK’s major financial institutions have overseas subsidiaries or affiliate banks, with whom you can set up either a straightforward foreign-currency account, or an account designed to be used internationally. Setting up an account with a foreign subsidiary or international division of your existing bank often simplifies such procedures as identity and address verification and will help to get the account up and running more quickly. If you are moving to another country for work purposes, it can also be worthwhile checking with your employer – they may have an existing relationship with a local banking provider to make things easier for employees coming into the country.
Bank account charges in other countries
Personal banking in the UK has traditionally been fairly resistant to transactional service charges. That means we are used to being able to use basic account facilities – such as debit cards, ATM withdrawals and regular payments like Direct Debits and standing orders – without paying a fee each time. Similarly, most UK bank accounts don’t charge a monthly account fee.
This isn’t necessarily the case in other countries, where you may have to pay monthly service charges and/or a surcharge per transaction, as well as for other services such as making withdrawals from other banks’ cash machines. Most banks should provide a full copy of the account terms and conditions – including all service charges – when you open an account, and it’s a good idea to look these through thoroughly, rather than making assumptions and later being surprised by unexpected bank charges.
Transferring money abroad
Unless you hold a specific type of account designed for international banking, you should expect to pay fees for transferring funds from a UK account to your foreign-currency account, whether it’s a one-off transfer or a recurring payment. Due to SEPA legislation charges will usually be lower between European member nations, but otherwise will be determined by your bank and could take the form of either flat-rate fees or (less commonly) percentage charges.
If you are transferring lump sums – for example if you are retiring to another country and permanently transferring all of your banking and savings balances – then it pays to check not only how much your bank will charge, but also how this may affect your tax liabilities both within the UK and in the destination country.
You may want to speak to a specialist currency broker who can help you decide when to transfer money to get the best rate.
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Please note: as we are awaiting information about the UK’s exit from the EU, this information is only correct up to 28th March 2019. As soon as we have more information, we will update these pages.