How easy is it, and how will it be affected by Brexit?
Packing your possessions and moving to a new country, either into or out of the UK, is never an easy experience. While previously this might have been the pursuit of those prone to bouts of windswept spontaneity, the reality is that the ways in which we live and work will be changing drastically over the next decade.
The Covid-19 pandemic has accelerated the progression of frictionless remote work: both the tools required to make this accessible to all, and the breakdown of the inertia that has held companies back from embracing it. While we might not all be shipping off to Bali right away, the number of expats and internationals globally is growing at an incredibly rate: by the 2030s, these are expected to number over 1.2bn people. Unfortunately, managing your finances internationally is still fraught with difficulties. So how can you prepare your finances for a move overseas?
A Mobile Phone Number. When moving to the UK in particular, there are two major things that you need: a UK phone number and a bank account. However what you’ll later find is that in order to get a phone contract, you need a bank account. You head to the bank and they say that you need a phone number to open an account. A classic chicken & egg problem. So what do you do?
The solution is to get a pre-paid phone contract or pay as you go sim card with a UK number. This will cross off one of the pre-requisites for a bank account.
Opening an overseas bank account. Ideally, you’d be doing this before you leave — having a bank account and a payment card ready on arrival can make life much cheaper and easier. Now, while this is an option in many countries for UK residents, leaving the EU has made this a whole lot more difficult for the class of 2021. Many UK banks, including Barclays and Lloyds are actually pulling products including current accounts from the continent. Some European banks have done the same, meaning that Europeans living in the UK may find they are now denied banking services from their usual bank. The solution may then be to switch domestic banking provider first, to one that you know will offer services in your destination country. It’s a question of small headache now to save large pain point down the line.
Transferring money abroad. Furthermore, bank charges for payments in Europe are also changing. Theoretically, despite leaving the EU, the UK is still a member of the Single European Payments Area (SEPA). This means that there shouldn’t be any changes. However, banks have decided to make up for shortfalls elsewhere by levying additional charges on UK payments. Now, by the end of the year, Strabo will be solving this — seamless transfer between accounts at market beating rates is coming very soon. But in the meantime, you can use Transferwise or set an auto-fill for the year’s expenses locked in when the rate swings in your favour. Either way, it pays to be prepared for a few months’ expenses at least before the big move.
Consider a temporary cash card. Failing the above, you can use a cash card with leniency for international money transfer to tide you over. Although tightening their allowances somewhat, Revolut is still a strong option — their raison d’etre after all is to provide banking services to travellers.
Don’t forget about tax! Now, the key here is to think about where you receive your income from. If any sources still come from the UK, you will still have to pay UK income tax — also relevant if you are working remotely. In the alternative case, local taxes will be due. Take this into consideration when choosing a destination — some jurisdictions are more onerous than others and this could have a significant affect on your quality of life. By registering with the relevant tax authorities before you leave, you will know what the process entails. Spending more than half the year abroad will also have positive consequences for any UK tax positions — as if you needed any more encouragement.
Move your pension. Legacy pension providers are often the most difficult of the list to deal with. However, this decision requires more long term thinking. We’d only recommend having your state and private pension paid to an overseas account if you are dead set on retiring there. In the alternative case, it may be better to leave these put if you plan on retiring, or making sure your pension options are flexible to prepare for future changes. We recommend PensionBee, who should soon be compatible with the Strabo platform, as first port of call. You can also check out The Pensions Advisory Service for FAQs and other information.
Moving Home. Most expats choose to rent, at least in the short term, while they get acclimatised to life in a new country, or the new reality of working remotely. However, if moving into the UK, now may be a time to take advantage of the weak £ (and stamp duty holiday), and the reverse should be kept at front of mind if going the other way. You may also want to consider local norms — in Germany for example, few people choose to buy property. One of the advantages of remote work is also the nomadic lifestyle, or semblance of such. Tying yourself down to a new city or country is often not solving your problem. You can find useful resources on the Association of International Property Professionals.
Applying for a Visa. Again, this will be even more relevant in light of Brexit developments. You’ll be able to stay for up to 90 days in any rolling 180 day period without a Visa. The same will apply for EU citizens in the UK. However, from 2022, UK nationals will have to pay for a visa-waiver scheme, known as the European Travel Information and Authorisation System, to visit many countries in Europe. The papers will be valid for three years. Having existing interests or relatives in your destination country may help this, as will working in a sector that is in high demand. Larger companies with a global outreach will be better placed to give you advice on this, but even a smooth application could take months. Do also note that a new passport will not be necessary for European moves just because of Brexit. Your passport will be valid as long as it’s less than 10 years old and has at least 6 months to expiry.
Bonus: Financial Assistance. Depending on your individual circumstances, you may qualify for financial assistance from the destination local government, especially if you have a young family or are employed in the public sector. Again, something to consider before you leave as there are often long wait times for such incentives (as one might imagine).
