Banking in UK

What you need to open a bank account

A standard set of documents you need to open a bank account includes:

Proof of Identity: Passport, biometric residence permit, or national identity card.
Proof of Address: Utility bill, council tax bill, or tenancy agreement. Some banks accept a UK driving license.
Immigration Status Documentation: Visa, residence permit, or work permit.

Some banks may also require your credit history. If you struggle to access yours, consider alternative banks or so-called ‘basic’ accounts for those with no or low credit history.

How to open a bank account without proof of address

Most UK banks require a proof of address to open an account, which can be tricky if you haven’t rented your permanent accommodation yet. Here are a few options to consider in such cases:

Digital Banks

Consider online neo-banks like Wise or Revolut. They often have more relaxed requirements for proof of address. In all the other aspects, digital banks offer perfectly valid UK bank accounts that you can use for paying your rent, receiving salary, and other matters.

List of most popular online banks:

Monese
Offers quick account setup without a UK address or credit history, making it popular among expats.
Revolut
Provides current account services, international currency exchange, and innovative budgeting tools.
Starling Bank
A full-service digital bank with a focus on user-friendly, comprehensive banking services.
Monzo
Known for its excellent app experience and budgeting features.
Wise* (formerly known as TransferWise)
Offers a borderless account with low fees for international transfers.

*Side note regarding Wise:

Wise (formerly TransferWise) isn’t quite a bank itself; it’s a financial technology company that specialises in international money transfers and currency exchange. It offers banking-like services such as the multi-currency account and debit cards but does not have a banking license in the UK or offer the full suite of services typically associated with traditional banks, such as savings accounts, mortgages, or loans.

Wise is regulated by financial authorities (like the Financial Conduct Authority in the UK) and provides some financial services similar to banks, but its primary focus and most well-known feature is its currency exchange and international transfer services, which are typically more cost-effective and transparent than traditional banks. This distinction is why Wise is often categorized separately from traditional and digital banks.

Tip: at the moment of writing this guide, Wise and Revolut have been most flexible with their registration conditions. All you need is a proof of your residence in the country (e.g. BRP) and your current address (no official proof required). Like with most other online banks, Wise and Revolut allow you to issue yourself a plastic Visa card.

What are alternative banking solutions for new immigrants?

Pre-paid account

Prepaid accounts can be a good temporary solution while you’re still figuring out your permanent banking services. These accounts do not require a credit check or a traditional banking history, which makes them almost instantly accessible upon your arrival. These services allow you to issue a contactless debit card which can be topped up as needed. Similar to traditional bank accounts, pre-paid alternatives can be used for managing daily expenses, receiving payments, or paying bills.

Pre-paid account providers in the UK:

Pockit

Instant pre-paid MasterCard with 8% cashback
Top up by bank transfer or debit card
Not protected by FCA
Suitable for money transfers and direct debit payments
£2.49/month

Suits Me

Payment account with no proof of address or photo ID required
Top up by bank transfer or debit card
Selection of partner cashback offers
Suitable for money transfers and direct debit payments
Flexible payment scheme: from pay-as-you-go to £9.97/month for premium

Tip: Pre-paid card providers may not be regulated by the Financial Conduct Authority (FCA), which means less protection over your finances than in traditional banks – so you might not want to use these solutions to deposit and transfer larger amounts of money.

When considering where to keep large assets or savings, it’s generally advisable to use these services for everyday transactions and basic banking needs rather than as the primary repository for significant funds. As with any financial decision, it’s beneficial to conduct thorough research and consult with a financial advisor to understand the best options for your specific circumstances.

Considerations to using pre-paid account services for large assets and savings:

Deposit Protection: Check if your deposits are protected and to what extent. Unlike traditional banks, some alternative banking solutions may not offer deposit protection schemes such as the FSCS in the UK, which protects up to £85,000 per person, per bank.

Financial Stability: Consider the financial stability and reputation of the provider. While they may offer convenient solutions, it’s not always possible to ensure they are a stable and reliable service, especially for handling significant amounts of money long-term.

Service Limitations: Be aware of any limitations in services compared to traditional banks, such as loan offerings, interest rates on savings, or international currency services.

Fees and Charges: Understand the fee structure for the account, including any charges for account management, transactions, or using the card abroad.

Customer Support: Ensure they have robust customer service options should any issues or questions arise with your account.

International Accounts: Some traditional banks offer international accounts specifically designed for new arrivals. These may not require a UK address initially.
Basic Bank Accounts: Designed for those with no fixed address. Provide minimal services and do not offer overdrafts.

How to open a High Street bank account

High street banks are the traditional, large banks that have a significant presence across the UK, with branches in most towns and cities. Examples include Barclays, HSBC, Lloyds, and NatWest. These banks offer a wide range of financial services, from current and savings accounts to loans and credit cards.

Do you need a high street bank account?

Many people in the UK no longer open high street bank accounts at all – especially since some of the online banks like Monzo got full banking licences and protection. However, it’s still worth considering traditional banks for the following reasons:

Accessibility and convenience: With branches and ATMs widely available, accessing your money, depositing cash or speaking to a banking advisor in person is much easier.

Full range of services: High street banks typically offer a comprehensive suite of financial products, making it easier to manage all your finances in one place – be it your savings, investments, loans or mortgages.

Reputation and security: Established for many years, these banks have built a strong reputation and offer higher levels of security for your money.

While high street banks offer many benefits, there are some considerations to keep in mind:

Requirements: Opening an account can require more documentation, which might be challenging to gather immediately upon arriving in the UK.

Fees: Some accounts might have monthly fees or charges for certain transactions. It’s essential to understand these to avoid unexpected costs.

Alternatives: Digital banks and financial technology (fintech) companies offer competitive services, often with lower fees and innovative features such as more advanced, intuitive mobile apps.

Deciding whether to open an account with a high street bank depends on your personal and financial situation. If you value in-person banking, need a wide range of financial products, and can meet the account opening requirements, a high street bank might be the right choice for you. However, if you prefer online banking, are looking for lower fees, and need a simpler account opening process, exploring digital banks and fintech options could be beneficial (at least for a start).

How to open a bank account in a traditional bank

Most traditional banks are now accepting online applications. Some of them may require an in-person appointment once your application is processed, others have already gone fully digital and will simply send you your card to your home address (e.g. Lloyds).

Mind that with most traditional banks, your card and your PIN will be sent to you in separate letters by standard mail (with digital banks, you are usually allowed to set your own PIN on the app). Keep your mail secure and out of reach of strangers to protect your financial assets.

Once your bank account is active, you will need to download your bank app and link it with your account to facilitate access to all services. Don’t forget to switch your app store on the phone to UK, as otherwise you may not be able to download the right apps.

List of traditional banks in the UK/England

Here is a list of some of the main traditional banks operating in the UK, including those that are popular or have significant operations in England:

Other notable banks:

How to transfer money from UK

Sending money internationally is a common need for immigrants in the UK, whether it’s for supporting family back home, paying for services, or transferring funds between accounts. Fortunately, over the last few years, various services catering to this need in the UK have been blooming – meaning transferring money is now easier than ever before. Here are the options you can use to send money abroad from UK:

Traditional Banks

Traditional banks offer international money transfer services, but they’re often not the most cost-effective due to higher fees and less favourable exchange rates. However, they are considered reliable and secure, making them a suitable option for those who prefer dealing with established financial institutions.

WorldRemit

WorldRemit is a digital alternative to cash-based money transfer services, allowing users to send money to over 130 countries quickly and securely. The service is known for its low fees, competitive exchange rates, and the convenience of sending money via their website or mobile app. Recipients can receive funds through bank deposit, mobile money, or cash pickup options, making it a versatile choice for international transfers.

Remitly

Remitly focuses on providing immigrant communities with a cost-effective way to send money home. Offering transfers to numerous countries, Remitly gives users the choice between express and economy transfers, balancing speed and cost to suit different needs. Their user-friendly platform and transparent pricing structure have made Remitly a popular choice among those looking for reliable and affordable international money transfer services.

Wise

Wise offers a transparent and inexpensive way to send money abroad, charging low fees and using the real exchange rate. Their service is straightforward, with no hidden costs, and they provide a convenient mobile app for managing and tracking transfers. Wise’s multi-currency account also allows you to hold and convert money in several currencies, offering a flexible solution for international finances.

PayPal/Xoom

PayPal is widely recognized for online payments, and its service, Xoom, extends this convenience to international money transfers. Xoom allows users to send money to over 130 countries, with options for bank transfers, cash pickups, and even bill payments abroad. While fees and exchange rates vary, the service’s ease of use and PayPal’s security make it a go-to choice for many.

How to transfer money to UK

Transferring assets or savings from your home country to the UK can be a complex process, especially for larger sums.

Understanding Transfer Difficulties and Fees

Amount and source: The complexity and potential fees depend largely on the amount being transferred and its source.
Bank scrutiny: Larger transfers are more likely to be scrutinised by banks.
Transfer channels: Different transfer methods (bank transfers, online services, brokers) have varying fees and regulations.

Tax Implications and Proofs

Gifts and personal Savings: Money accumulated as personal savings or received as gifts before moving to the UK is generally not taxed. However, proof may be required. Banks may request documentation to comply with anti-money laundering regulations.
Documentation: Keep all relevant documents (gift deeds, bank statements, salary slips) ready to substantiate the source of your funds.

Compliance with legal and banking norms

Refer to official resources for legal compliance in money transfers:

GOV.UK – Bringing money into the UK
GOV.UK – Tax on foreign income
GOV.UK – Anti-money laundering guidance

Bringing and depositing cash

Risks with cash: Avoid using cash for significant transfers. Remember you can bring up to £10,000 in cash without declaration.
Bank policies: Depositing large cash amounts can lead to frozen bank accounts. Be prepared with supporting documentation if needed.

Community-based money exchange

One of the popular ways to exchange money is to find someone in your community who needs a bank transfer back home. However, it’s important to remember that such informal cash exchanges are not protected by any regulations:

No one will be able to refund you your bank transfer if anything goes wrong, and there is always a risk of being scammed.
Large or irregular transactions might trigger bank monitoring for tax evasion or money laundering.

Make sure you only exchange money with someone you know and trust, and be prepared to present any supporting documentation in case the bank considers your transaction suspicious.

How to ensure your transfers go through: best practices for safe and compliant transfers

Document everything: Keep a thorough record of all transactions and supporting documents.
Use reputable transfer services: Opt for secure and well-established transfer methods.
Stay informed: Keep updated with UK’s financial regulations and any changes in the law.
Report large transfers: Declare any large sums brought into the country as per UK customs regulations.
Understand exchange rates: Check up-to-date exchange rates at the time of transfer to get the best deal.
Plan ahead: Time your transfer to avoid peak times for better rates and faster processing.

How to transfer gifts and savings via bank transfers

When transferring personal savings or receiving a gift to the UK, it’s important to have proper documentation to validate the nature of these funds. This is crucial both for banking procedures in the UK and for adhering to legal requirements, particularly those aimed at preventing money laundering.

Tip: Based on the majority of cases, it’s highly unlikely that your bank will question the nature of smaller gifts and savings transfers (within a few hundreds of pounds). However, the larger the sum, the more likely your banks would want to know where this money is coming from. It’s always recommended to keep track of your documentation and have all necessary papers at hand – just in case.

Here are the documents you should prepare:

For personal savings:
- Bank statements: Historical bank statements showing the accumulation of savings over time.
- Salary slips/paystubs: If the savings are from your income, recent paystubs can help establish this.
- Employment contract: Demonstrates your source of income.
- Tax returns: Evidence of declared income and savings on tax returns.
- Sale agreements: If the savings are from the sale of property, shares, or other assets, relevant sale agreements and receipts.
For receiving a gift:
- Gift deed or letter: A formal document from the donor stating that the money is a gift and not a loan. It should include the donor’s name, relationship to you, and the amount of the gift.
- Donor’s bank statements: Showing the withdrawal of the gifted amount.
- Donor’s source of funds: Documents such as bank statements or other evidence showing the origin of the donor’s funds.
- Identity proof of the donor: Passport or ID card to verify the donor’s identity.
Additional documentation for both:
- Personal identification: Your passport or national ID card.
- Proof of address: Recent utility bill or bank statement showing your current address.
- Letter from bank or lawyer: In some cases, a letter from your or the donor’s bank or lawyer confirming the legitimacy of the funds can be helpful.
- Foreign exchange or transfer receipts: If the funds have already been exchanged or transferred, receipts of these transactions.
Legal compliance documents:
- Compliance declaration: Some banks may require a signed declaration that the funds comply with tax and money laundering laws.
Tax Compliance:
- Consultation evidence: If you consulted a tax advisor, documentation of their advice might be useful.

Remember, each bank may have its own specific requirements, and it’s advisable to check with them in advance. Additionally, if the amount is substantial, consulting with a legal or financial advisor is recommended to ensure full compliance with both your home country’s and UK regulations.

How to transfer big sums of money in foreign currency

To transfer substantial amounts of money to the UK (e.g. your future down payment for a house), you may want to consider opening an international currency account in a high street bank. Banks like HSBC, Barclays, and Lloyds offer accounts where you can hold and manage money in multiple currencies. Mind them every bank has its own procedure for opening a bank account in a foreign currency. Conditions may involve a minimum deposit (e.g. $5000), which also varies depending on the banks.

Things to know about taking cash in and out of the UK

Gov.uk has a detailed guide outlining how to cross the UK border with cash. Here are some of the basics to know:

Taking cash in and out of Great Britain

You must declare cash of £10,000 or more to UK customs if you’re carrying it between Great Britain (England, Scotland and Wales) and a country outside the UK.

If you’re travelling as a family or group with more than £10,000 in total (even if individuals are carrying less than that) you still need to make a declaration.

If you’re travelling to Northern Ireland and carrying more than €10,000 (or equivalent) you must follow the rules for taking cash into Northern Ireland.

The earliest you can make a declaration is 72 hours before you plan to travel.

Taking cash in and out of Northern Ireland

You must declare cash of €10,000 or more if you carry it between Northern Ireland and any non-EU country. You must also declare cash of €10,000 or more if you’re arriving in Northern Ireland from Great Britain.

You do not need to declare any amount of cash when travelling the other way, from Northern Ireland to Great Britain. If you’re travelling as a family or group with more than €10,000 in total (even if individuals are carrying less than that) you still need to make a declaration.

Customs authorities may ask you to fill in a cash disclosure form if you send cash by freight, post or parcel between Northern Ireland and any non-EU country. This includes if you send cash from Great Britain to Northern Ireland.

When you need to declare cash

You must declare:

notes and coins
bearer bonds
travellers’ cheques
cheques (including travellers’ cheques) that are signed but not made out to a person or organisation

If you are carrying cash in or out of Northern Ireland, you must also declare:

money orders
gold coins, bullion or nuggets
prepaid cards

What you’ll need to make a declaration

You’ll need to give details of:

who’s carrying the cash, the owner of it and the recipient of it – including passport or ID document number, and address
your journey – with any countries you pass through in transit, including flight numbers or ferry routes
the amount and type of cash being carried
the source of the cash – the country it came from and how it was generated (for example, through earnings or selling something)
what the cash will be used for

How to declare cash at UK border

If you’re leaving the UK, you must declare cash before you leave the country.

If you’re coming to the UK you can declare cash before you travel or as soon as you arrive in the UK.

Declare cash before you travel

Declare online for:

Cash you’re carrying between Great Britain and any other country

Cash you’re carrying between Northern Ireland and a non-EU country

Cash you’re carrying from Great Britain to Northern Ireland

If you cannot use the online service you can make your declaration over the phone.

Customer Service Group

Telephone: 0300 322 9434

Monday to Friday, 8am to 6pm

Declare cash when you arrive in the UK

At UK customs, follow ‘goods to declare’ or ‘red channel’ signs, and tell a Border Force officer you want to declare cash.

You may have to use a courtesy phone. They may give you a paper form to fill in or take your declaration themselves.

If there is no way to make a declaration at the port or airport when you arrive, call 0300 322 9434 and make your declaration over the phone.

Penalties

If you do not declare cash that you should have, all the cash you are carrying can be seized by a Border Force officer. You may have to pay a penalty of up to £5,000 to get it back. This can be taken from the cash before the rest is returned.

Any cash can be seized if customs authorities have reasonable grounds to suspect a crime. They can keep the cash for 48 hours – after that they need a court order.

How to build your credit score in the UK

Building a good credit score is crucial for anyone looking to settle in UK. A strong credit score can open doors to loans, mortgages, and credit cards, often with more favourable terms and interest rates.

Understanding the UK Credit Score

In the UK, credit scores are calculated by three main credit reference agencies (CRAs): Experian, Equifax, and TransUnion. These scores are determined based on your financial history, including how you’ve managed loans, credit cards, and other forms of credit. The scores can vary between agencies, as they may have different information and scoring models.

Steps to Build Your Credit Score

1. Start with a bank account

Opening a UK bank account is your first step. It’s not only essential for managing your daily finances but also acts as proof of your residency and financial reliability. Regularly using your bank account and managing it well can positively impact your credit history.

2. Apply for a credit card

By using a credit card for small purchases and paying off the balance in full every month, you can start building a positive credit history. If you are not yet eligible for regular credit cards, consider special credit building cards – they typically have lower limits and higher interest rates, but they are easier to get. If you only use them for small purchases and top up regularly, it can be a great asset to building up a favourable credit score.

3. Pay bills on time

Ensure you pay all your bills, including utility bills, phone contracts, and rent, on time. Late or missed payments can negatively affect your credit score. Some rental payment schemes report your rental payment history to credit reference agencies, which can help build your score.

5. Use credit wisely

Be cautious with credit. Avoid using a high percentage of your available credit limit, as this can indicate financial stress to lenders. Aim to use less than 30% of your credit limit and pay off balances in full each month to avoid interest charges.

6. Limit credit applications

Each time you apply for credit, it leaves a ‘hard search’ on your report, which can lower your score if you make several applications in a short period. Only apply for credit when necessary, and consider using eligibility checkers that perform a ‘soft search’ to gauge your chances of approval without impacting your credit score.

7. Review your credit report regularly

Regularly check your credit report with all three CRAs to ensure there are no errors or fraudulent activities. If you find inaccuracies, dispute them immediately. You’re entitled to a free report from each agency once a year, or more frequently through certain subscription services or by signing up with the CRA directly.

7. Register on the electoral roll

Once you’re eligible, register on the electoral roll at your current address. This registration is an important factor that agencies do consider, as it confirms your identity and address, making you appear more stable to lenders.

Building a good credit score is a marathon, not a sprint. Consistently managing your finances responsibly will gradually improve your score. Be patient, as it takes time for your actions to reflect in your credit history.