The British diaspora currently stands at 4.27 million. Britons are scattered in different regions all across the world. These include investors, expats, retirees, or people running charities abroad. They send money back home to pay bills, invest in alternative assets, pay for shipments and much more.
Whether or not you fall into this category, it is important to understand the different ways you can send money back home. This guide has a collection of all the relevant information you need.
Sending money to the United Kingdom is simple and easy. Follow these steps to get started.
There are multiple ways to easily send and receive money in the United Kingdom but these will largely depend on the provider you decide to use. Below you will find everything you need to know about sending and receiving money.
Sending money to the United Kingdom from any country in the world is not just simple, but full of options as well. There are two main channels you can use to send: inter-bank transfers or money transfer service providers. Let us look at how they stack up against each other.
The United Kingdom has some of the biggest banks in the world. Banks such as HSBC, Royal Bank of Scotland, Lloyds Banking Group, Barclays, and NatWest are well-capitalised with assets running into billions of pounds.
These and other banks in the U.K. have been the backbone of international wire transfers in and out of the country. The Australia-United Kingdom remittance corridor being the busiest, transfers are mostly inter-bank and involve businesses.
Despite high transfer fees, unfavourable exchange rates, and slow transfer speeds, banks are still the people’s choice for large transfers. For instance, British diaspora uses inter-bank transfers for sending pension earnings to the U.K.
There are lots of factors that influence inter-bank transfers. For example, when sending from the United States to the U.K., timezone differences are a major factor. New York is on GMT-5 and London is on British Summer Time (BST), equivalent to GMT+1.
With that said, correspondent banks have come up with a way to speed up the arrival of funds by “back-valuing” the transfer. However, to compensate for the transaction speed, they revise the fees upwards.
An increasing number of people are sending money to the United Kingdom using money transfer service providers. The speed, low transfer costs, high exchange rates, and other factors, make this mode of transfer one of the best for non-business transactions.
Money transfer operators (MTOs) such as SendFX, TransferWise, MoneyGram, Western Union, WorldRemit and World First are popular on most transfer corridors to the U.K. Setting up on these platforms is very simple. All you need is to sign up for an online account, pay for your transfer using a debit card, credit card, or bank transfer and send!
Western Union and MoneyGram allow you to send money to the U.K. from a physical store or begin the process online and complete it instore. In terms of support, providers like Currencyfair and SendFx have both online and phone support.
There are two main ways you can send money to the U.K. through money transfer service providers: bank transfers and cash pickups.
The money is deposited directly to the recipient bank in the United Kingdom. The advantage of this method over the traditional bank transfer is that the recipient doesn’t need to have a bank account. They can send from a credit card or debit card. Depending on where you are sending from, the transfer can take minutes.
This mode of sending money to the U.K. allows the recipient to collect it in cash from a nearby agent within the payout network. It is convenient for sending small amounts of money. Every provider gives a limit on how much money you can transfer to the United Kingdom. Western Union allows up to GBP 4,000.00 per transfer. Cash pickup transfers are instant.
When you pay for your transfer using a credit card, you’ll end up paying more because of third party fees. The best option is a debit card; it charges low fees and guarantees you a faster transfer. To find out more, you can check our money transfer fees guide.
International money orders have been used in the United Kingdom for a long time but their acceptability at banks, post offices, and private fund transfer organisations like Western Union is now debatable. The best advice is to avoid them if you have an alternative transfer option you could use.
Sending money to the United Kingdom whether through banks or money transfer service providers, isn’t as hard as sending from the United Kingdom to other countries. The reason is that Anti Money Laundering regulations tend to be tougher when sending from the U.K. You’ll need to provide the following information when sending to the United Kingdom.
In some cases, you may be asked to provide information on the source and purpose of the funds. This requirement is one of the Financial Conduct Authority ( FCA) regulations to help counter money laundering.
If you are in the United Kingdom and looking for a faster and more convenient way of receiving money from your loved one overseas, there are two main ways you could do so. You can choose a bank deposit or cash collection.
The sender can deposit money directly into your U.K. bank account. In this way, you can access it anytime based on your urgency or needs. MTOs such as Western Union, Moneycorp, Xoom, MoneyGram and WorldRemit, have signed agreements with banks to allow for faster movement of funds.
Xoom launched in the U.K. in mid- July 2019, bringing its presence in continental Europe to 31 countries.
You can access your money in cash from a number of agents in the U.K. based on the provider you opt for. For instance, Western Union has 5,200+ agent locations across the U.K.
Cash collection as a method is suited for receiving small amounts. Ensure you choose an agent that is at a safer place and if you can, deposit large amounts immediately in a bank account to avoid unnecessary losses.
To access money in the U.K., you’ll have to identify yourself and prove that you are the legitimate recipient. The following information will go along way into helping you claim your money.
If you are collecting the money from a MoneyGram agent, you may be required to fill a form. This process is purposely done to collect more information for regulatory measures.
As pointed out earlier, most Britons in the diaspora are either investors, pensioners, expats, or people working for international charity organisations. As such, the reasons they send money home differ from person to person. However, the following are the main reasons Britons in the diaspora send money home.
Most Britons in the diaspora send their children to study in the U.K. The main driver is the high quality of education in the U.K. compared to many other regions. On average undergraduate and graduate studies cost anything from $17,000 – $25,000 in the U.K. Living expenses range from $1,300- $1,600 per month. With such kind of costs to foot, many Britons send money regularly to the U.K.
While most Britons prefer travelling with their families, some of them leave their loved ones behind. Depending on whether their loved ones back at home are working on not, it is common to find Britons in the diaspora sending money home to support their families.
Healthcare in the United Kingdom is one of the best in terms of quality. However, it is costly both to outsiders and even British citizens. To help with medical care for their families and relatives, Britons overseas may send a few pounds through MTOs.
It is not uncommon to find Britons in the diaspora owning houses or renting spaces back at home for safe storage of their property. Whether they are containers or formal homes, such spaces attract rent which some Britons pay from abroad.
Despite the volatility of the British pound and Brexit jitters, some Britons in the diaspora still send money home for investments in financial assets. Savings in fixed-term deposits are also common in the U.K.
Other reasons may include sending money for charity and social causes such as weddings and festivals.
Banks have been the traditional channels for sending money to the U.K. However, the tide is changing fast and money transfer service providers are dominating most transfer corridors. Here are some of the reasons behind the shift in preference.
When sending to the United Kingdom, there are certain factors you need to bear in mind. Aspects such as taxation, exchange rate fluctuations and cash withdrawal limits need to be carefully considered.
With more MTOs coming into the U.K. remittance corridors, sending money is getting simpler and cheaper with time. However, you need to do your homework and pick out the providers offering the best rates, low fees and quicker delivery times.
Sending money anywhere else in the world is as easy as sending money to the United Kingdom. If you're looking to send money to another country, here is the list of the most popular destinations.
Jonathan is the founder and editor of MoneyTransfers.com. Jonathan is highly experienced in the currency transfer market, having previously worked in the FX trading industry, alongside being an avid traveller. Using his knowledge he identified a need for transparency and further education to help people save money on their money transfers, leading to the creation of MoneyTransfers.com