Currency Exchange Update: Emigrating Brits “waste up to £900m”

Brits emigrating abroad could collectively be losing as much as £900 million a year by relying on high street banks that are cashing in by offering unfavourable exchange rates, warns the currency specialist department of

Each year approximately 90,000 British families leave the UK to live overseas, lured by the promise of sunnier climes and outdoor living. However, thousands are risking their pot of gold at the end of the runway by paying over the odds for currency exchange and relying on their high street bank to transfer their assets.

On average, a UK family emigrates abroad with assets of £250,000 from the sale of a house, car and some savings. While they carefully plan their new lives in minute detail, what many overlook is the potential cost of leaving their currency exchange in the wrong hands. By transferring their worldly goods to their new country via a high street bank, the average family risks losing up to a staggering £10,000 of their assets. According to research from HiFX, banks typically charge 4% more than currency specialists in unfavourable exchange rates.

Mark Bodega, marketing director of HIFX said: “Making the decision to move to a new country is a big undertaking, both emotionally and financially. The last thing that any family taking the leap would want to do is unnecessarily lose as much as £10,000 in the process. Unfortunately though, this is exactly the case for the many people who entrust the transfer of their assets from old to new country to their regular high street bank. This huge loss could be avoided simply by people being aware of the alternatives and making sure they get the best rate for their money, early on in the process.”

As well as falling victim to inflated charges on exchange rates, émigrés are also at the mercy of currency fluctuation as they are rarely able to transfer all their assets in one go. The time it takes to make a successful visa application and eventually move abroad can be anything from nine months to four years. During this time, exchange rate fluctuations can have a huge impact on a person’s future wealth because at various points during the process they will have to convert some or all of their assets into the local currency of the new country. For example, when moving £250,000 to Canada over a four year period, currency fluctuation could mean you risk as much as £68, 500.

Each year HiFX helps 2,500 families emigrate from the UK. They have identified Australia, New Zealand and Canada as the top three destinations for Britons moving abroad permanently.

Bodega said: “What many people may not realise is that they have the option of ‘fixing’ the exchange rate or taking out a forward contract on the destination currency as soon as they have made the decision the move. Without doing this many wannabe emigrés are taking a huge gamble with their money. People need to seek proper advice at the outset from currency specialists, who are also usually able to offer a far better rate of exchange than the banks.”

When transferring all your UK wealth HiFX recommends considering forward contacts. In essence this means people can buy their currency as soon as they start the emigration process and pay for it later (once they have sold their UK house for example). By doing this consumers are completely protected from exchange rate movements as they have ‘locked in’ the exchange rate at the time of setting the contract.

Bodega added: “The earlier you begin thinking about your currency requirements, the more likely you will be able to start your new life with as much money as possible. The majority of people emigrating from the UK are not millionaires jetting off to a luxury island, but everyday people who are likely to be most affected by banks charging over the odds for currency exchange and losses through currency fluctuation when transferring their worldly goods overseas.” For mortgage rates across the whole of Europe have access to ALL deals.