Top five things to do with your finances before you emigrate

Many of us move abroad each year, for all sorts of reasons. If you’re planning to emigrate, what should you do with your money?

retirees abroad

There are some important things to keep in mind relating to your finances when you move abroad. It may not be possible or economical to continue to use your old bank accounts when you’re in a new country.

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

  1. Pay off your debts

  2. 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, but consider paying off credit cards, loans or other debts. Student loan debt is a little different.

  3. Keep an eye on exchange rates

  4. 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 when exchange rates change.

    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.

  5. Open an international bank account

  6. 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.

    Moneyfacts have an offshore bank account comparison tool where you can 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.

  7. Decide what to do with your pension

  8. 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 to.

    Just make sure that you check you are transferring to a recognised overseas pension scheme (ROPS). You can find a list of HMRC-certified overseas pensions schemes here. You should also check that transfers into your ROPS are free of UK tax, it’s your responsibility to do so.

    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.

  9. Consolidate your savings

  10. 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 choose to keep an ISA open at home for long-term savings, while having an international account for your more immediate finances.

    Note: 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.