There are nearly four million migrants living and working in the UK. That’s a lot of people looking to send money abroad!
Every year, these workers send home an estimated $20bn (£17.2bn GBP) for a variety of reasons, such as supporting friends and relatives, buying property, covering mortgage payments, completing business deals, or simply paying for travel overseas.
Whatever the reason for sending money abroad, if you’re a migrant based in the United Kingdom it is important to find the most effective way to make an international money transfer.
Here are the 3 main questions you should always ask:
1: Cost: Am I getting the cheapest deal?
2: Safety & Convenience: Is the transfer secure, easy to arrange and fast?
3: Money transfer company: (Ultimately, it all comes down to this question) Am I using the best company to make an international bank transfer?
To help you make answer these questions and make an informed choice, whilst securing the best deal on the market, here is our step-by-step guide to sending money abroad from the UK:
Table of Contents
1: The best way to send money abroad from the UK
International bank transfers
Sending money abroad via an international bank transfer is cheaper, faster, and safer than other methods, such as cash or credit card payments.
An international bank transfer allows you to send money from your account in the UK to one in a different country.
It is essentially the same as a wire transfer or telegraphic transfer and how most international payments are made.
Depending on the service provider you are using, expect a delivery time of 1-4 days when you transfer money from a UK account to one abroad.
Transactions from the UK to countries inside the European economic area (EEA) tend to be faster than other destinations. You can expect most to arrive within the next working day.
In the UK, there are no legal limits on how much money you can send abroad, but some banks do set a daily limit.
2: How to make an international bank transfer
The first time you make an international bank transfer to a person or business you will need the following information:
● The full name and address of the recipient
● The recipient’s bank
● The bank’s SWIFT code (also known as BIC, or Bank Identifier Code)
● The recipient’s International Bank Account Number (IBAN)
It’s worth noting that the recipient can be the same person as the one sending the money.
Once you have collected all this information, you need to go through four steps before being able to make the transfer.
Step 1. Identification
Identification is necessary due to global anti-money laundering regulations.
If you’re a UK resident, at this stage you’ll be asked to provide passport and address details.
Alternatively, some money transfer companies may require a recent utility bill.
Identification is usually completed within the same working day.
Step 2. Securing an exchange rate
Once you’ve been identified, you will be quoted an exchange rate and, if you are satisfied, you will be able to lock it and go ahead with the transfer
More information about exchange rates below [Hypertext link to ‘Fees & Charges’ Section].
Step 3. Sending the money
If you’re using your bank to make the transfer, you will need to have the money in your current account.
If you’re using a money transfer company, you will need to send the money to their client’s bank account. The simplest payment method is typically by debit card.
Step 4. Converting the money
Once your money has finally made it to the recipient’s account, it will be converted into the local currency at the exchange rate that you locked at stage 2.
3: International bank transfer fees and charges
There’s no way around it: when sending money abroad from the UK, there are payment fees and charges involved.
The two basic costs you will have to pay are the upfront transfer fee and the exchange rate.
Upfront transfer fee
Transfer money companies need to make a profit, so each transfer usually comes with its own fee, which can be a flat fee or a percentage of the amount you’re sending.
Some companies advertise fee-free transfer services but it is likely that they will offer costly exchange rates to get their money back.
The exchange rate
When sending money abroad, it’s important that you get a quote to secure the best exchange rate on the market.
After all, a difference of less than one percent will make a big difference if you are transferring large sums!
However, finding the best exchange rate deal can be daunting.
Exchange rates change constantly and some money transfer companies don’t even publish their rates, forcing customers to chase people on the phone to get a quote.
This is why the exchange rate has come to be known as the ‘hidden’ fee.
In fact, your transfer might get charged differently based on the currency and on the amount you are sending.
Some money transfer agents even adjust their fees without giving prior warning to their customers.
4: The best time to make an international bank transfer
When sending money abroad, good timing is of the essence.
If you’re in a rush to send money abroad because of a family emergency or an urgent financial commitment, you may not have the luxury to wait for the exchange rate to go down.
Also, if you are sending small sums of money a tiny variation may not be of concern to you.
But if you have the money and time to spare, it does make sense to wait for lower exchange rates.
However, it’s hard to tell when a good time to make an international bank transfer might be.
That’s because the exchange rates are affected by a whole lot of factors.
These include a country’s interest rate, inflation, mid-market rates, economic trends and even global geopolitical events.
Although there’s no ultimate way to predict exchange rate fluctuations, there are some common mistakes you can avoid when picking the best time to send money abroad.
If you’re a migrant worker in the UK, it might be tempting to send money home the very moment you’ve received your salary at the end of the month.
However, this is when money transfer companies are the busiest, with most international transitions occurring the last ten days of the month and the first five days of the next one.
Incidentally, this is also when some companies increase their fees to capitalise on higher demand volumes.
To avoid higher fees and longer waiting times, you may want to send money during off-peak periods halfway through the month.
[Fact check!] Using TransferGo, you can expect to be charged an exchange rate margin between 0.5% and 1.5% .
Besides the exchange rate, you will also pay a flat fee depending on the delivery option you choose:
● Standard. Sending money within the next 3 days costs £0.99. It can be free in some European countries and you will be able to transfer your money in 24 hours..
● Today. Sending money the same day usually costs between £1.99 and £2.99£, depending on the country.
● Express. This option will get your money transferred the next day (usually in the morning hours), and it costs £2.99.
● 30 Minutes. Sending money in 30 minutes costs around £2.99. The fee varies depending on the country you send the money to.
5: International bank transfer safety
International bank transfers are the safest option to send money abroad because they use the SWIFT payment network, a secure payment system that’s been adopted by financial institutions for more than 40 years.
Whatever service operator you may choose to make an international bank transfer from the UK, it is very important that the company is regulated by the Financial Conduct Authority (FCA).
Safety-wisey, money transfer companies fall into two categories: FCA-‘authorised’ and FCA-‘registered’ businesses.
For peace of mind, a company ‘authorised’ by the FCA is the safer option.
At the end of each business day, an FCA-authorised company will separate its customer’s money from its own, keeping it in a safeguarded account.
This means that your money is safe at all times, even if the company were to go bust as you’re making the transaction.
In other words, if you make an international money transfer via an FCA-authorised business, you have a 100% guarantee that your money will never get lost.
On the other hand, a business that is only ‘registered’ by the FCA does not provide the same level of safety.
If an FCA-registered company finds itself in some sort of difficulty at the time of your transaction, there’s no safety process in place to protect your transaction, meaning that you could lose your money.
You can check if a money transfer company is FCA-regulated on the FCA register.
FACT CHECK: TransferGo is a registered payment service provider. We are supervised by HM Revenue & Customs (HMRC) under the Money Laundering Regulations: 12667079 and regulated by the UK Financial Conduct Authority (FCA) as an authorised payment institution: 600886.
When it comes to your transactions, they’re going to be HTTPS encrypted as per the industry standard. We also use SSL technology to keep your money safe.
6: Money transfer company types
If you need to send money abroad via an international bank transfer, your own bank might feel like the obvious choice, and understandably so.
Over the years, you will have probably built a good rapport with your bank, so it only makes sense to be tempted to rely on familiar faces to make an international bank transfer.
Many banks advertise 0% commission charges for international money transfers. While this can be true, it is usually the case that the receiving account must belong to the same banking group.
This means that if the recipient holds an account with a different bank, you will probably be charged a commission fee.
In fact, banks are often the most expensive option to send money abroad, charging an average of 11% on the amount you need to transfer.
This is because banks tend to charge high exchange rates, usually adding a markup to the mid-market rate that can get as high as 4-6%.
TransferGo charges a far smaller profit margin on foreign exchange currencies than most UK banks.
[Fact check] In general, you can expect to be charged an exchange rate margin between 0.5% and 1.5% for TransferGo services.
This is much lower than the 4% – 6% margin you’ll be charged when sending money overseas with your bank.
Remittance companies are a good option for those who need to send cash abroad quickly.
Sending money abroad via cash is indeed the fastest transfer option since the transaction doesn’t need to clear through the banking system.
This means that the recipient doesn’t need to have a bank account: all they need to do is turn up at a receiving point, present some form of identification, and cash in.
There are however two major drawbacks when sending money abroad with a cash remittance company.
Firstly, there are usually limits on the amounts of money you can transfer via a cash remittance company.
More importantly, cash remittance companies are an expensive way of sending money abroad.
For example, Western Union doesn’t use the real exchange rate but adds a margin in order to take a hidden fee.
As acknowledged by Western Union itself, there are money transfer companies out there offering better exchange rates:
“Western Union’s exchange rate may be less favourable than some publicly reported commercial exchange rates used in transactions between banks or other financial institutions.” (Western Union, Terms and Conditions)
TransferGo gives a transparent breakdown of all the fees and exchange rates applicable to each transfer.
You will always be able to see both the exchange rate and the flat fee applied to your transfer before you make it.
Online Money Transfer Companies
Also known as ‘fintechs’, online transfer companies are the cheapest option to send money abroad.
An online transfer company allows you to save up to 4% of the amount you’re sending compared to a bank.
Online transfer companies are a technology-based method of sending money abroad as they offer do-it-yourself software.
Some of the best-known money transfer apps are Revolut, Paysend, CurrencyFair, PayPal and TransferGo.
One commonly-cited drawback is that online transfer companies offer no human contact.
Accordingly, if you have a problem with your transaction or just a query, you’re left to deal with a chatbot or, in the best case scenario, to chase somebody via email.
While some online transfer companies do leave everything up to you, this is not necessarily the case.
There are online transfer companies out there that do have dedicated customer service teams, just like any other financial business.
At TransferGo, our Customer Support team is multilingual, works from several countries, and deals with hundreds of queries every day.
You can check our customer service reviews here.
FAQs – Some Frequently Asked Questions about international money transfers
What is the best way to transfer money internationally?
International bank transfers are the safest option to send money abroad because they use the SWIFT payment network, a secure payment system that’s been used by financial institutions for more than 40 years.
What is the cheapest way of transferring money internationally?
An online transfer company allows you to save up to 4% of the amount you’re sending compared to a bank. OTCs allow you to send money online using do-it-yourself software that converts your pounds (GBP) into the foreign currency of your choice . Some of the best-known money transfer apps are Revolut, Paysend, CurrencyFair, PayPal and TransferGo.
What are the steps for international money transfer?
Step 1 (Identification) If you’re a UK resident, you’ll be asked to provide your passport and address details. Alternatively, some money transfer companies may require a recent utility bill. Identification is usually completed within the same working day.
Step 2 (Securing an exchange rate) Once you’ve been identified, you will be quoted an exchange rate and, if you are satisfied, you will be able to lock it and go ahead with the transfer.
Step 3 (Sending the money) If you’re using your bank to make the transfer, you will need to have the money in your account.
If you’re using a money transfer company, you will need to send the money to their client bank account by transfer or debit card.
Step 4 (Converting the money) Once your money has made it to the recipient’s account, it will be converted into the local currency at the exchange rate that you locked in step 2.