Banking in the UK for expats

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For over 300 years the City of London has been the world’s financial capital, attracting investment from around the globe.

The UK’s central bank, the Bank of England, was founded in 1694 and is the world’s oldest central bank, after the Swedish Riksbank which came into being 26 years earlier.

Alongside the bank, the London Stock Exchange produces market information which enables London to maintain its pre-eminence. 

Since then, of course, a whole range of retail and investment banks have emerged and newcomers to London have a range of choices for their day-to-day banking needs.

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The requirements for opening a bank account and the potential pitfalls are the same for ex-pats as for UK-born applicants. Proof of ID and address is vital (the POST OFFICE will certify passports and utility bills as proof of residence) , although new residents may face problems with establishing their credit rating. A number of larger banks have, however, put in place procedures to ease any problems.

Barclays, for example, offers a bespoke account for new arrivals, including the usual benefits of a debit card, direct debits and online banking. In this case, proof of address can be a bank statement from the individual's country of origin. One advantage of this is an ex-pat can open the account in their country of origin prior to departure to the UK. provided that Barclays has a branch there.

Another bank with global reach is HSBC. An HSBC basic account can, again, be opened in the country of origin. This requires an address in the UK, but if the individual has no permanent residency they can use a residency in their host country and change it on arrival in the UK, or use a contract of employment as proof of residency.

The Halifax has a huge high street presence in the UK and also attract ex-pats by offering a monthly top-up of £5 for those who deposit £750 per month or more into the current account.

Another incentive is offered by Lloyds with a 4 percent interest top-up on balances of £4,000-£5,000 with a monthly pay-in of £1,500. Lower balances of up to £2,000 also attract interest payments. Meanwhile Nationwide also offers a 5 percent interest top-up on balances over £2,500.

A relative newcomer to the British High Street is Spanish-based Santander. A 3 percent payment on balance is available, as well as cashback payments when household bills are paid through the account. There is a £500 threshold on payments into the account each month. Another alternative is a bank with no high street presence, First Direct. This offers 24/7/365 telephone and internet banking. HSBC is its parent company and money can be deposited at its branches. A free £250 overdraft is available.

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Sharia-approved banking is available in the UK through a number of banks such as Al Rayan Bank.

Those wishing to open such an account may be advised to seek specialist advice from City lawyers who have a world-renowned Islamic banking sections

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For Chinese ex-pats, the Bank of China has long had a major presence in London. Four other state-controlled banks have joined them. These are ICBC, CCB, ABC and BoCom.

The Bank of China (BOC) was the first major Chinese player in the UK financial services sector, with both a subsidiary and branches throughout the UK. Since 2009, the other four major state-controlled banks - China Construction Bank (CCB), Industrial and Commercial Bank of China (ICBC), Bank of Communications (BoCom), and Agricultural Bank of China (ABC) have also established themselves, together with China Merchant Bank (CMB), China’s first joint-stock commercial bank.

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There is also a wide range of traditional banking options for ex-pats in London able to produce the relevant documentation including visa and work permits. The process may take a couple of weeks.

 

Although the history of London’s major financial institutions has created the base for the Capital’s success, the evolution of financial technology in banking is now at the heart of the continuing attraction of London for expats from every nation.