It gives me great pleasure to introduce Pauline’s guest post today which covers various aspects that you need to consider when relocating to the UK. Pauline has an inspirational story to tell about how she made her dream a reality. She is relatively new to the personal finance blog scene but a regular reader and commenter at SavvyScot. I regularly read Pauline’s blog (RFI) and am looking forward to tracking her progress as she moves to Guatemala! Enjoy Folks…
The following is a guest post from Pauline Paquin, a French girl who has recently started to blog over at Reach Financial Independence. Pauline blogs about how she has been traveling the world for the past 10 years, while trying to build wealth and achieve financial independence, and how you can follow your dreams and reach your goals too. You can follow Pauline on Twitter @RFIndependence.
I moved to the UK in 2007 to start a new job in Surrey. Relocating from sunny Barcelona, I had a main goal in mind: be as savvy as possible with my new UK income and get enough payslips to buy a property. I reached that goal in just under two years, and will share with you a few tips that I learned along the way to take care of your hard earned pounds.
What you need to work in the UK
Many EU nationals are tempted by the higher salaries and job opportunities of the UK, even though the pound is much weaker than it used to be.
It is pretty straightforward to start working in the UK, if you are from the EU. You will need to apply for a National Insurance number which is like a social security number. You can start working while your application is processed.
The tax year runs from April 6th to April 5th, and most companies will retain taxes through the Pay As You Earn system (PAYE). It means that the estimated taxes for the year will be debited monthly with each pay. At the end of the year, you may get a refund or have a debit rolled over for the next year.
If you make less than £100,00 a year, then the first £8,105 of income is tax-free.
Important: If you only work for a few months, or stop working in the UK and come back home, it is very likely that you have overpaid taxes. Contact Revenue and Customs when you leave the country, and fill a P85 form to claim that money back.
The National Health System
As a UK resident you are entitled to healthcare via the NHS. You will need to register with a doctor (GP) and visits with him are free, then he may refer you to other specialists.
Regarding dental care, you can either go via the NHS, or private. The same dentist will usually accept a quota of NHS and private patients. Prices are higher for private patients, but you don’t have to wait so much for a consultation. You can check out healthcare plans that include dental checkups and basic treatments for a small monthly fee.
Getting a flat or a room in the UK
It is pretty straightforward to get a room. Most flatshares won’t even ask for your income, as long as you can pay down a month deposit and the first month’s rent. Know that if you sign a AST (Assured Shorthold Tenancy), your landlord has an obligation to protect your deposit via a Tenancy Deposit Protection scheme. AST contracts normally run for a 6 months minimum period, so make sure you are ready to stay that long or you may lose your deposit.
Gumtree is your friend. The website compiles lots of local ads, to rent, share, and furnish your flat. They have good deals on used furniture people are getting rid of, or you can also try Freecycle to find free furniture.
Getting a bank account in the UK
I went to the bank with my boss to open a first account, and apparently if you don’t have a work contract and a permanent address, it can be a bit hard to open an account.
HSBC has launched a ”passport account” that you can open before you get to the UK, it costs £8 for a minimum of 6 months and can be an option if other banks refuse to open a normal account for you.
Sending your money home
I started working when £1 got you €1.47 and 15 months later we were at only €1.05. So much for my big savings and my future flat. As long as you are living in the UK, you don’t really mind, but if you want to send money, make sure you get the best possible rate, it adds up quickly.
Money Saving Experts has a section about cheap travel money, and I recommend you ask your banker about transfer fees and commission before you decide to wire anything. Several credit cards have no fee for purchases and ATM withdrawal abroad, which is perfect if you go back on holiday once in a while. I personally use that and a currency transfer service that has a 1% spread instead of the 2% a high street bank usually charges, when I need to send bigger sums home.
The UK on the cheap, how to save money on daily items
I remember being shocked the first time I went to the supermarket. Things were so expensive! After a few months, I learned a few tricks.
They often have a discounted section with products that will expire soon at a high discount. Most supermarkets have loyalty programs that can earn you rewards to spend in restaurants, shops, or back at the supermarket.
If you shop at the end of the town’s market, you can get cheap fruits and vegetables too.
Shopping and utilities
Use cashback sites for shopping and comparison sites to make sure you have the best deal on utilities, phone and broadband. Quidco, Uswitch and Energyhelpline are good places to start.
Travel and tourism
Wait for special offers. I wanted to visit the country while I was living there. I remember booking a £40 car for three full days and a £9 hotel room, because I had waited for the right moment to book. Subscribe to newsletters from hotel chains and transport companies to make sure you don’t miss out.
Many attractions in London have a 2 for 1 offer if you go by train. Check out free days for museums and any discount or voucher that you could print online.
Get a train card and an Oyster card in London. The train and tube are very expensive, so get a Railcard if you will use it often, as well as an Oyster card to enjoy 50% off transports fares in London. Your Oyster card will always be the cheapest option, and will be capped if you travel a lot on the same day, at the price of a day ticket.
Get an ISA! You are entitled to a tax-free Individual Savings Account (ISA) where you can put up to £11,280, in stock and shares, or up to half in cash and half in stock and shares. Every tax year, you get a new allowance. Don’t use it and you lose it. If you withdraw money from a maxed-out ISA, you won’t be able to deposit the money back again. Comparison sites will help you find the best rates for ISAs.
Which is the most appealing country for you to relocate to and why? Is it the tax-free haven of Monaco… or the Beautiful beaches of Thailand?
Keep up-to-date with Pauline’s relocation over at RFI guys