How To Set Up A Bank Account In The UK – Advice For New Expats

By opening a bank account, expats will avoid being hit with hefty transaction fees for withdrawing cash because of currency conversions.

UK employers pay salaries directly into bank accounts, so expats working in the country will definitely need a local bank account. The biggest challenge is when an expat does not have a credit history within the UK. They will also need a variety of documentation to open a bank account.Among the items needed is a valid proof of address, but this will be an issue for someone who has just landed in the country. The expat will also need to prove their identity as well, for instance with a passport. Some banks will also accept a National Insurance number which an expat will need to register for.

Most bank accounts can be opened from overseas which makes the process easier as well as safer, though the expat will still need to offer the relevant documentation to the bank when they are in the country.

Most banks do not insist that the expat deposits any cash before the account becomes active, and they all offer Internet and telephone banking facilities which many expats will find useful.

It costs nothing to apply when opening an account and the bank will give the expat a debit card which makes purchasing items in shops much easier.
While most bank accounts are free, some banks charge customers for having an account with them.

Types of banks and accounts

Like most other countries in the world, there are various types of banks and accounts to help meet a variety of needs such as business or personal purposes; this means that not every bank will be suitable.

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Expats need to appreciate that there are two distinct types of banking services available in the UK so they can set up an account with a bank or they can create one with a building society; they are effectively the same and offer similar services, though banks are usually listed on the stock market while building societies are mutual institutions which do not have shareholders but have members (i.e. their customers) instead.

Along with high street banks, which offer services to the public, business banking accounts are also offered, and there are specialist investment banks too. The wide range of potential banks can be daunting as well as frustrating, so the expat should take time to research the best options.

While there are lots of banks in the UK, the biggest ones are HSBC, Lloyds, Royal Bank of Scotland, and Barclays. Though these are big operators with branches on most high streets, this does not mean they necessarily offer the best services to meet an expat’s needs.

It is worth shopping around and asking other expats which bank they would recommend using in the UK. Some of these offerings will have a monthly fee, some will be free and some offer more additional services than others.
Expat forums tend to be a good source of information and one of the banks that is recommended regularly is Barclays because their criteria for proof of address makes it easier for expats with just a passport to open an account without the struggle of finding a relevant piece of documentation with their address on it.

The websites for the banks also offer helpful information when it comes to an expat opening an account. Lloyds, for instance, states that expats opening a basic bank account only need their passport to do so (though they also point out that they may ‘occasionally’ need a second piece of identification).

Also, expats moving to the UK should appreciate that a personal bank account is known as a current account or what some expats may know as a ‘checking account’.

A current account enables an expat to pay in their salary and create standing orders and direct debits for paying bills. Most of these accounts also come with an overdraft facility as well as a cheque book and a debit card; the overdraft may not be offered, however, since the expat will not have a credit rating in the UK so the bank will not know how credit-worthy they are.

While the breadth of banks and accounts may appear to be daunting, an expat can make the process of finding a suitable bank account easier by finding out what fees and charges as well as overdraft costs a bank will apply.

Also, while many banks will offer to pay interest on a credit balance, some will not. Some banks also offer an incentive to join them by offering money to open the account or give other incentives.

The expat should also determine how they would prefer to interact with the bank as this will have an impact on which one they will choose. For instance, if they want to deal with bank in person then they need to check that the bank has a high street branch they can visit; many UK banks have reduced their network of branches as more British customers tend to use online and telephone banking instead.

One of the positives for opting to use a branch is that the bank may allocate an account manager so the expat has someone to contact directly who will understand their needs and create a relationship between them and the bank itself.

While many will offer the prospect of opening an account before an expat leaves their home country, an account can also be opened when they have landed but it’s important they take along the relevant documentation after arranging a meeting with someone who can open the account for them.

While many banks will require proof of a UK address it is possible to open an account without this and simply offer proof of a non-UK address – HSBC has an account with this requirement.

For a proof of address, the expat should provide a tenancy agreement or a UK driving licence or they could also use their council tax bill or utility bills.

Expats can also consider opening a bank account with the Halifax, or with First Direct which doesn’t have any branches and is an online bank that offers everything a ‘real world’ bank does. There’s also Santander, which has a global presence so it might be easier for their customers to open an account in their home country.

With a booming job market for expats in the UK, the banks have responded by offering a range of accounts to help meet this growing need which have a basic facility and the customer cannot be overdrawn. They also offer bank accounts with a multi-currency facility so an expat can pay bills in their home country or deal with their financial commitments there.

Among them is an offering from Barclays which offers an account for those who are new to the UK. The account delivers a full range of the bank services including mobile, telephone and online banking. There’s also a contactless debit card which can be used to withdraw up to £300 every day, if the expat has enough funds.

The account can be opened before the expat leaves home and they will need to produce one form of ID, for instance a passport, and proof of address.
Other banks offer similar accounts, including the HSBC which likes to describe itself as a world bank. They too offer the ability to open an account before expat leaves their home country.

Expats can also use the services of firms that offer to create a bank account setup package which makes the process easier but can be quite pricey. Most employers sending their employees to the UK will offer a package of services to help, which may include the setting up of a bank account.

While it’s easy to set up a bank account from overseas, most British banks would prefer that the account is created in one of their branches.

Also, most British banks do not charge for minor transactions such as withdrawing cash from ATMs or for the issuing of cheques.

The network of ATMs in the UK is extensive and it’s also possible to withdraw cash from many outlets including shops and supermarkets when buying goods. It should be noted that expats using a foreign issue bankcard will probably incur charges for each ATM or shop transaction.

Should the expat need to contact their bank then the branches are generally open between 9.30am and 4.30pm and often on Saturday mornings too. Telephone banking is also an important offering from many of the big banks.

In our interconnected digital world, growing numbers of people are using mobile phones to access their bank accounts via banking apps. All the facilities that expats are looking for from online banking are also available from their app.

This is probably a good point to highlight that bank security is much improved in recent years, particularly for online banking fraud.

Some bank customers can access their accounts with a password and security question, while other banks use apps that utilise biometric data such as a thumbprint or eye-scanner to ensure the person accessing the bank account is the bank account holder. Banks also deliver a free card reading device so that a unique access number can be generated for any cash transactions to help reduce levels of fraud.

As mentioned previously, it is much easier for expats to open a bank account in the UK today than it was previously, but one of the stumbling blocks for opening a current bank account is that the bank will usually check for a good credit score.

The obvious problem is that if the expat has never lived in the UK previously then they will not have had a chance to build a credit rating which is a way of monitoring how someone uses their credit cards, and whether they repay loans or pay their bills on time.

For this reason, basic bank accounts are growing in popularity since they enable the paying of bills by direct debit and standing order, allow salaries to be paid in and cash to be withdrawn via an ATM.

It should also be appreciated that for some expats the best choice of bank account will be an offshore account since this will make transferring money between currencies much easier and they tend to have an account manager.

However, the criteria for getting an offshore bank account are quite strict and those wanting one should have a large initial sum of money to deposit as well as a large salary.

Along with current accounts and basic bank accounts, UK banks also offer packaged accounts which are simply a current account that has extra features such as mobile phone and travel insurance and possibly car breakdown cover as well. They also offer overdrafts with a preferential rate of interest which will cost between £8 and £15 a month.

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