It’s a thrilling time — you’ve decided to move from the green and pleasant land of the UK to the sun-drenched paradise of Australia. Before setting off on your antipodean adventure, you need to make sure you’ve got all your finances in place on the other side of the world.
Before going to your bank to transfer your life savings away from Britain, take a moment to work out what the best options are. Follow our handy guide on sending savings from the UK to Australia, and we can save you a significant amount in currency exchange fees.
It might be one of the last things you think about, but just spending half an hour exploring your options could save you thousands of pounds.
In this guide we’ll cover:
- Reasons you might be transferring your life savings.
- How currency exchange and money transfers work.
- Why you want the best deal when you’re moving savings.
- Typical fees and commissions for transferring savings overseas.
- Comparing your bank to a dedicated currency exchange provider.
- Dedicated currency exchange providers and the services they offer.
- How to use a currency provider to transfer your savings from the UK to Australia.
- What to do with your money that’s still in the UK.
- Hints and tips.
Read on for our advice on how to make the most of your money and get off to a great start in Oz.
How to Find the Cheapest Way to Transfer Money From the UK to Australia
Compare The Total Cost
The total cost of the transfer comes down to 2 things:
1. Transfer Fees
Every Australian bank and money transfer company will charge you a different fee to send money overseas. Usually it’s between $10 and $32.
2. Exchange Rate Margin
There is no “standard” exchange rate. Each bank will offer you a different exchange rate based on the currency you want to send overseas and the amount you need to send.
Reasons for Sending Savings from the UK to Australia
There are dozens of reasons why you could be making a new life in Australia, and need the financial backing to avoid any concerns over money.
- You might have the opportunity to study abroad, so you’ve decided to continue your education overseas.
- Perhaps you’re fed up with the British weather and want to enjoy the dazzling sunshine and the coastal lifestyle of Australia.
- You could be moving for an extended period of work because your business is expanding overseas.
- Maybe you’re done with work altogether and want to retire to somewhere warm and welcoming.
Whatever your reasons, it’s important to make the most of winding down your old life in the UK and starting a new one thousands of miles away. It’s going to be an adventure!
How Currency Exchange and Money Transfer Works
Transferring your savings overseas involves converting your finances from one currency to another, in this case UK pounds sterling to Australian dollars. Money transfer uses a universally agreed upon exchange rate as a baseline. This exchange rate is used to calculate exactly how much of your money will be converted into Australian dollars, based on the amount you are transferring.
Your UK pounds sterling amount will be subject to certain fees and exchange rate commissions which will determine how many Australian dollars you receive. This depends on several important factors:
- The prevailing, interbank, baseline exchange rate between UKP and AUD. How much of your savings you are transferring.
- How you are paying for your transfer in the UK (typically via bank transfer or debit card).
- The variation between the baseline exchange rate and the exchange rate you are offered by a money exchange service, your bank, or PayPal.
- How you are receiving your money in Australia (typically directly into a bank account).
- Various other fees and factors.
Why You Want the Best Deal when You’re Moving Savings
You might be wondering why you want to spend time researching rates and fees when you could just transfer money via your bank or PayPal. The reason is that your bank will not offer you nearly as good an exchange rate as a dedicated currency exchange provider. Banks and PayPal typically:
- Have worse exchange rates than dedicated providers. Charge higher fees than a dedicated provider.
- Won’t provide dedicated customer service to answer any questions and manage the transfer on your behalf.
- Won’t allow you to set a rate that you want to exchange at (known as a “forward contract”).
For example, taking into account the average exchange rates and fees provided by banks, compared to a dedicated currency exchange provider:
On a transfer of £50,000, you could pay over £2,500 more if you use a bank or PayPal.
Typical Fees and Commissions for Transferring Savings Overseas
There are several areas that have a big influence on how much you will pay to send your money from the UK to Australia. Let’s dig into the main areas that impact how much you will pay.
The Exchange Rate a Provider Offers
There are dozens of currency exchange and money transfer providers, from PayPal or your bank to dedicated currency exchange businesses like Transferwise or HiFX. The biggest impact on your fees is how much the exchange rates they offer you differ from the interbank, or mid-market, baseline rate.
Any difference between those rates directly impacts the amount of money you will receive.
Here’s an example on converting UK pounds to Australian dollars:
- Interbank, mid-market rate for transferring GBP to AUD (baseline) — 1.6768 AUD per GBP.
- PayPal exchange rate for transferring GBP to AUD — 1.63203 AUD per GBP.
- Barclays exchange rate for transferring GBP to AUD — 1.5832 AUD per GBP.
- TorFX currency provider exchange rate for transferring GBP to AUD — 1.6710 AUD per GBP.
- Difference between PayPal and baseline rate — 2.7% worse.
- Difference between Barclays and baseline rate — 6% worse.
- Difference between TorFX and baseline rate — 0.35% worse.
These exchange rates are correct as of late June 2017. The exchange rate you are offered may vary depending on multiple factors including date, time, amount you are transferring, and various other areas.
Commissions or Extra Fees for Money Transfers
In addition to making money on exchange rates, some providers charge additional fees, either as a fixed fee, or as an additional commission percentage. For example, Barclays Bank charges a varying fee of between £15 and £40 for currency transfers to Australian dollars.
Payment Fees for Deposit and Withdrawal
Some banks and other payment providers charge an additional fee for sending or receiving international money into an account. This might be as an “International Wire Fee” or some other charge.
Other providers may charge additional fees, either as a fixed rate or a percentage they take as commission.
Comparing Your Bank to Dedicated Currency Providers
Our money transfer and currency exchange comparison tool takes into account exchange rates and fees to accurately show you how much money you could save. Here’s how much you would get from various providers if you were converting 50,000 UK pounds to Australian dollars.
|Provider||GBP to AUD Exchange Rates||Transfer Fee||Total AUD for £50,000||Difference to Baseline|
As you can see, using a dedicated currency provider like TorFX or OFX can save you a massive amount compared to using your bank — you could get between 5% and 6% more money using a currency provider.
Benefits of Dedicated Currency Providers
There are some excellent choices when you want to exchange your savings the UK and Australia. Dedicated currency providers like TorFX, HiFX, OFX, and World First provide low-cost, competitive options for transferring money quickly and easily.
These providers have several benefits including:
- Much lower fees and better exchange rates than PayPal or banks.
- Fast transfers, money can sometimes be transferred within one working day.
- Dedicated customer support and advice, essential when you’re transferring your life savings!
- Online options for sending money through their website or app.
- Forward or limit orders to manage risk and reduce market fluctuations.
- Mobile apps and other tools to manage the money transfer processes.
Using a Currency Provider to Transfer Your Savings
It’s easy to setup an account with a currency provider to transfer your savings:
- Use our comparison tool to see who can offer you the best deal.
- When you’ve decided on a provider, just visit their website directly from our tool.
- Create an account with the currency provider — you will generally need a proof of identification and a proof of address.
- Get an up-to-date quote for transferring between UK pounds and Australian dollars.
- Arrange your transfer using their online service or over the phone. If you call up, they will generally provide a dedicated account manager.
- Provide details of the bank account receiving the money — you will generally need an IBAN or SWIFT number.
- Send money to your currency provider by funding your account, normally by bank transfer or debit card.
- Your currency provider will make the exchange and deposit funds into the recipient bank account.
What to Do With Your Money That’s Still in the UK
Once you’ve moved your savings you may still be getting an income in the UK from retirement savings, property investment, your stock portfolio, or something else. If that’s the case it’s easy to setup regular transfers from the UK to Australia with a dedicated currency provider.
You can automatically fund transfers, they will apply the correct exchange rate and deposit the money in your Australian bank account within a couple of days.
Advice on Transferring Savings Between the UK and Australia
Here are a few tips on getting the most value out of your international currency exchange.
- Use our quote tool to find the best value transfer for any circumstance.
- Check with the sending and receiving banks to see if they charge any fees for sending or receiving funds.
- Ask your currency provider about “forward” or “market limit” orders — these allow you to set a “threshold” for exchange rates, so you only move money if it hits arate you’ve set. This can help you manage risk and get a better rates for your money transfer.
- Because you’re transferring a large amount, give your currency provider a call as they may offer more competitive rates.
There you have it, a complete guide to transferring your savings between the UK and Australia. We hope the extra money you save means you have an even better time experiencing the wonderful nation, culture, and people of Australia.
The information provided in this article was correct at the time it was written in June 2017. Exchange rates change constantly, and therefore the rates will be different at the time of the transaction. The article is designed to give you an idea of the differences in cost of using different providers, not to give you an exact estimate of what your transfer will cost. Personal research is pivotal in discovering the best option for your own situation.
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