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UK International Bank Transfer Fees

If you live in the UK and need to send money overseas, there are a number of ways to do so. The sheer convenience of using your bank to make an international money transfer is often the motivating factor behind customers’ decision to arrange this type of transfer. However, in this guide we will look at whether this is best decision, based on the various costs associated with UK international bank transfers as well as the increasing number of alternative options.

Updated: 27/07/2022
Read time: 6 minutes
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What is an international bank transfer?

This type of payment refers to a remittance sent overseas via bank transfer. Often seen as the most convenient way to make an international money transfer, UK banks offer different deals and incentives to encourage customers interested in utilising these services. However, this convenience often comes at a price, one that can cost a great deal when compared to the alternatives.

What international bank transfer fees should I expect?

Although some UK banks advertise “fee-free” international bank transfers, this is usually a marketing ploy which is compensating for an inferior foreign exchange rate, as opposed to the ‘real’ mid-market rate used by banks. Find out which common costs you should keep an eye out for when arranging an international bank transfer:

Transfer fees

Foreign transfer fees come in various shapes and sizes, and are not always made crystal clear by the bank. Sometimes they are calculated as a percentage of the transfer amount, other times they come as a fixed flat-fee which is factored into the cost. It is also not unheard of for both the sender and receiver to incur charges for international bank transfers, so it is worth both parties discussing this ahead of time. 

Exchange rates

This is often considered the “hidden charge” as banks like Lloyds (learn more about Lloyds exchange rates) do not always explicitly disclose this information, in fear of putting off customers. Instead of offering the mid-market rate – the exchange rate used by banks when trading foreign exchange – a mark-up is added to the rate when presenting the total amount to customers. This is where customers can end up losing a lot of money that should ultimately be going to the recipient. It is important to identify what kind of mark-up is being added to your transfer, as this can make all the difference in the long run. Typically UK banks implement exchange rate margins ranging from 2 to 4 %.

Don't forget about the SEPA

Despite leaving the EU in December 2020, the UK will continue to participate in the Single Euro Payments Area (SEPA) and individuals and businesses in the UK can still send and receive SEPA payments. Under European regulations, banks cannot charge more for overseas payments within the SEPA zone or charge a transaction fee for making a SEPA payment.

How much will I pay for an international bank transfer in the UK?

On average, international bank transfers can cost customers £20 – 40 in fees, and not all of these charges are transparent. Like all money transfers, the total fees incurred depend on the country you are sending money to, the amount you are sending, and which currency you are using. 

Is it possible to send a free international bank transfer?

While many UK banks advertise “free” international bank transfers, this is not always the case. More often than not, banks will present their own version of an exchange rate without divulging the fact this rate contains a markup which eats into the amount of money the recipient should get. 

What are the alternatives to international bank transfers?

Cheaper, more intuitive international transfers options exist to benefit both those sending and receiving overseas payments. The best alternative for anyone looking to swerve the high costs and outdated infrastructure associated with international bank transfers, would be to use an international money transfer provider. 

These specialist providers are better equipped at handling international money transfers and offer far more flexible, accessible and cost-effective solutions. The most competitive exchange rates available can be found via international money transfer providers and many of the best companies are based in the UK, which is great for UK bank account holders. 

Who is best suited to an international money transfer provider?

Anyone can benefit from the transparency of money transfer services offered by specialist providers, but those making regular international payments will get the most out of these services. Whether you are an international student paying off your loan or making preparations for getting married abroad, there are a multitude of benefits to arranging your international money transfers through these specialist companies. Not only do they offer to match the mid-market rate, but their services are typically tailored to meet the needs of customers managing cross-border finances. 

Best international money transfer providers for UK customers?

Before you decide whether to use your bank for international remittances, check out our pick of the best 3 international money transfer providers for UK customers:

PagoFX 

PagoFX is a comfortable middle ground for anyone who wants to ensure their funds are backed by a trusted global banking group, while also securing competitive exchange rates. As a payment service provided by Santander, one of the UK’s biggest banks, PagoFX can guarantee high-security standards are met. Sending money with PagoFX will result in better exchange rates and lower fees, starting at just 0.7% which is substantially lower than most international bank transfers.

Wise 

Wise is another great option for UK customers searching for better deals for their foreign exchange. Based in the UK, Wise has spent the last 10 years fine tuning their international money transfer offerings, tailoring transfer types to suit customer needs. As a service, Wise is easy to use, totally transparent and offers great customer service capabilities for both personal and business users.

Azimo

This international money transfer company is based in the UK and a great option for British customers searching for lower fees and more favourable exchange rates than what their bank has to offer. Customers can send money to over 200 destinations using Azimo’s wide reaching network, making this a fantastic option for those sending money to a more remote country or currency. In addition to this, there are many different pay-out options available via this service, including cash pick-up and mobile airtime top-up.

Bottom line 

For those in the United Kingdom, international bank transfer fees are typically pretty steep. This being said, the charges incurred when transferring money internationally using your bank will vary depending on your circumstances. It is important to keep an eye on the real mid-market rate, so you can identify any hidden markups on exchange rates, as well as fixed fees added on top. 

In almost every case, an international money transfer provider will be able to beat the exchange rates offered by your bank and they are likely to charge far lower transfer fees too. Use our comparison engine to find the very best service to suit your specific financial requirements. 

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April Summers

April is a trained journalist and the Content Editor for MoneyTransfers.com. She has 10 years experience writing about a diverse range of subjects, from financial services to arts and entertainment. When she’s not writing about global remittances she can be found daydreaming about her next holiday abroad.

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