An expat finance guide and planning

Friday, 29 May 2009 13:46

The expat finance guide on offshore savings and planning while on the move

by James Gairdner, Managing Director, Halifax International

The idea of uprooting the family, packing your bags and possessions away and making a brand new start of it sounds like the perfect cure to beat those post winter blues. Somewhere with a more flexible lifestyle and better weather would be just the ticket. In fact, research from Halifax International shows that 4% of Britons already own a home abroad, and a further 27% have said that they are considering the option of moving or buying property overseas in the future.

However, before you make the move abroad, there are lots of things to consider - the language barrier, rules, regulations, customs and how you will manage your finances both at home and while you are away.

You may be working overseas, living permanently or temporarily abroad, or simply an expat on the move. In any event it is extremely important to make the most of your savings and enjoy the flexibility to enable them to work in the best way possible for you, wherever you are. It is also essential to consider the currencies that are important to you and those that you will need to fulfil your financial commitments both at home and abroad. In addition, having the ability to change money into different currencies, whenever and wherever, is a must.

Money Management Abroad

When planning your move abroad, you should take a look at how you manage your money in the UK and assess whether you will have the same needs abroad, or if you will require something different. Choosing the right product is essential to help you make the most of your money.

France and Spain, for example, are the most popular European destinations for British people to move to. Anyone who is considering buying a property in either location should think very carefully about what steps they need to take to protect themselves against fluctuating exchange rates. Sterling has never been so weak against the Euro, but by opening a Sterling and Euro account, you would be able to convert your money as and when the rate was most beneficial for you.

Similarly, if you are retiring and buying a property in Spain - the most popular European destination for British pensioners - but all your savings and pensions are in Sterling, it would be advisable to open a Sterling and Euro account so that you can convert the money when the best Euro conversion rate was available. This would ensure that you make the most of your hard earned savings, whilst also enabling you to earn additional interest on these funds.

It may be that you are going to work abroad and will be receiving your salary in US Dollars, but are still faced with paying your mortgage in the UK. Your local bank in the UK may agree to convert your Dollar salary to Sterling when it receives the funds, but this may not be at the best conversion rate possible. A Dollar and Sterling account will help make the transition easier and will enable you to convert the money at a rate that is right for you, ensuring you stay in control.

As well as considering what offshore savings account will enable you to get you the best exchange rates, you might also want to think carefully about how you intend to conduct your transactions when away from the UK.

The speed and convenience of internet banking is highly appealing, especially for those who like to manage their money on the go or arrange their banking in the comfort of their own homes. Having an offshore account that allows you to be in control of your money, regardless of the time of day or your location is far more convenient, effective and less time consuming than the alternative. Frankly, do you really want to turn up at your local bank in person and fill in numerous forms so that they can make the international payments on your behalf?

Choosing an account that is right for you

When choosing an account that is right for you consider such factors as how your salary or pension gets paid in to your account, your lifestyle, financial commitments, the currencies they are in and general financial management. There are some accounts that will charge you after a certain number of transactions, so if you regularly make trips abroad it may be most suitable to hold a savings account that offers unlimited withdrawals and transfers in and out without penalties or hidden costs.
The Halifax International Variable Web Saver offers an offshore account with a highly competitive rate of interest and is available in Sterling (up to 1.40%), Euros (up to 1.45%), Dollars (up to 0.90%.) The minimum balance is £1,000, €1,000 or US $1,000 and the maximum balance is £1m, €1m or $1m. These accounts allow unlimited withdrawals and can be opened as either a sole or joint account, with up to two account holders, which means that they are ideal for handling an expatriate's financial commitments.