5 min read

Top five things to do with your finances before you emigrate

Research shows there are more than five million Brits living abroad1 with more than 323,000 emigrating in 2014 alone2.

A young couple, surrounded with boxes, sit on the floor, drink tea and look at a laptop.
  1. Pay off your debts
  2. Keep an eye on exchange rates
  3. Open an international bank account
  4. Decide what to do with your pension
  5. Consolidate your savings

When relocating to a foreign country, there’s also the matter of what happens to your money after you emigrate. This is on top of immigration forms, finding a place to live, and breaking the news to family and friends. Unfortunately, it’s not as simple as just continuing to use your old bank accounts when you’re in a new country. Find out arrangements you could make for your finances.

Every country will have different rules and quirks when it comes to finances, tax, savings and investments. But wherever in the world you’re headed, here are five things you should consider:

1. Pay off your debts

When you emigrate, planning the financial side should start as far ahead as possible. It is reasonable to expect that getting your finances in order could take up to six months.

The first thing to prioritise is paying off any outstanding debts you have.  Leaving personal debts in the UK is risky, as exchange rate fluctuations could see the costs of this debt increase. Fully paying off a mortgage may not be possible, even if you are selling your home to move. However you should make sure that you consider paying off credit cards or loans.

An app like Debt Tracker can be a really convenient way to keep track of everything in one place. Especially when you have a goal to focus on, like moving abroad, organisation is key.

2. Keep an eye on exchange rates

In the months before you emigrate, checking exchange rates should be as regular as checking your email. As well as affecting any debts you might have, exchange rates can provide all manner of issues when it comes to moving abroad. For example, buying a house in a foreign currency could see you paying more than you expected in pounds Sterling if exchange rates fluctuate.

Major changes to the exchange rate could have a big impact upon your move, and may see you unexpectedly pushed over your budget. A service like Travelex’s rate tracker may be useful – you can receive daily or weekly updates on the rates in your destination country, with specific “trigger rate” alerts when it hits a certain point – whether higher or lower.

3. Open an international bank account

It’s worth keeping your UK bank account open, but you won’t be able to use it as easily while you’re abroad. Your bank may offer an international bank account, which will mean you can easily access your money from anywhere in the world.

Money Facts have a great offshore bank account comparison tool, and you can also search over 150 listed accounts by currency and account type – incredibly useful for getting an overview of a type of account you may never have used before.

The benefit of an international account is that you can transfer money between it and your UK bank account without a transaction fee. This is ideal if you still have a source of income in the UK, such as a pension.

4. Decide what to do with your pension

Speaking of pensions, you have a couple of options when it comes to moving abroad. You can leave your pension in a UK plan, or you can transfer to a new provider in the country you’re moving to3. Just make sure that you check you are transferring to a Qualifying Recognised Overseas Pension Scheme (QROPS). You can find a list of HMRC certified overseas pensions schemes here.

Checking that a provider is a QROPS is your responsibility. If it’s not a QROPS, your UK scheme can refuse to transfer your money, or charge 40% tax – or more. Whether you’re still paying in, or are withdrawing from a pension scheme, it’s important to get things in order before you make the move. You can find out more about your pension options when you emigrate on the Pension Advisory Service website.

5. Consolidate your savings

While there are many advantages to having a diverse savings and investments portfolio while living in the UK. The more organisations you have to deal with from overseas, the more complicated things can become. Consolidating your savings into one or two places, which you can access easily from your new country of residence, could make everything much simpler to manage.

You can’t keep paying into an ISA from overseas, although you can still keep it open and receive UK tax relief on the money held within it. You may find it’s best to keep an ISA open at home for long-term savings, while having an international account for your more immediate finances.


Source: 1 http://www.dailymail.co.uk/news/article-2690347/Revealed-Where-5million-Brits-live-abroad-1-3million-Australia-four-emigrated-San-Marino.html

2 http://www.telegraph.co.uk/news/general-election-2015/politics-blog/11620356/Emigration-nation-who-are-the-thousands-fleeing-Britain-each-year.html

3 http://www.pensionsadvisoryservice.org.uk/about-pensions/when-things-change/moving-abroad

Note: Whilst we take care to ensure Talking Finance content is accurate at the time of publication, individual circumstances can differ so please don’t rely on it when making financial decisions.