Financial News

Rip off bank charges rip off expats switching cash

British banks are ripping off expats by overcharging for switching funds from the UK to overseas when other specialist firms offer the same service for free.

The banks are charging expats up to £300 a year to switch their money, which many expats can ill-afford due to rising living costs and an uncompetitive exchange rate from the Pound to Euro.

A survey by the Post Office revealed more than half of expats (51%) send money abroad through their banks.

Convenience is the main reason for foreign currency transfers through a bank (42%), while around a third admitted shopping around for the best price deal (36%).

The survey compared exchange rates and charges offered by six UK high street banks and two specialist providers – the Post Office and Moneycorp.

All the banks routinely charged more than the specialist providers

The findings showed on average, every expat is wasting at least £158 a year on bank money transfers.

Saving £158 would give expats enough to buy 130 litres of fuel in Spain or a return flights for two from the Costas to the UK, while saving £300 would buy a meal for two with wine in a restaurant on the Algarve, Portugal.

Michael Gibbon, Head of Post Office International Payments, said: “With rising prices and falling property values overseas, it is no wonder that confidence is low amongst the expat community. However, many expats are wasting hard-earned cash or savings simply by paying charges to transfer funds via their bank.

“Depending on which bank they use and how much they transfer, they could lose hundreds of pounds every year that could help offset the higher prices for food, motoring and household necessities.

“With sterling experiencing a four year high against the euro, people who send funds in larger amounts once or twice a year might want to transfer smaller amounts more frequently to take advantage of the improved euro exchange rate. If they do that through a bank they will pay hefty charges but with Post Office, it will cost nothing.”

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