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Users Guide for SA expats – UK money matters sorted

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For many South Africans moving to the UK the devil is in the detail when it comes to settling in and setting up a home. Learning and understanding the nuances of a new country can take time and be frustrating, but can also be costly. 

As an SA expat myself, these tips from South Africans living in the UK, both recent and veteran, to help you get set up quickly, and financially efficiently, are what I wish I’d known when I moved to the UK.

United Kingdom
United Kingdom

Preparation: Four things to consider

Aim to have enough cash saved up for both the transition itself and at least the first month, longer if you don’t have a job yet as finding one can take time. To figure out what the UK-side transition costs could be, consider your options in terms of:

  1.     Where you will live
  2.     The school your kids will attend
  3.     Your mode(s) of transport
  4.     Your furniture and other large appliance

1. Weigh up your priorities to decide where to live

Aside from housing prices, the cost of living in London is generally higher compared with elsewhere in the UK. For example, according to Numbeo, a database of user contributed data about cities and countries worldwide, a three-bedroom apartment in a Surrey town centre could cost you almost 47% less than one in central London, and the consumer price index (a measure of the cost of living) is also around 2% less.

If you’ll be working in central London, though, you’ll need to include the commute costs in your calculations and consider the potential increased time and effort. Other factors that may be important to you are proximity to airports, pollution levels and of course, schooling if you have kids.

Start shopping around well in advance to get a sense of what’s available in different areas and to get an idea of how much you’ll need to have available for your deposit, often 6 week’s rent. Rental agents need to do both credit and ‘right to rent’ checks and often need original paperwork. You can do much of the leg work from SA via courier, or consider booking short term accommodation such as AirBnB initially, and then finding, and furnishing, your long term accommodation once you’re there.

2. Schooling could be anything between free or costly.

As a UK resident, you can send your child to a state school, funded by the government. There are some good quality state schools but standards do vary so it’s best to do some research and use the standardised inspection reports available, such as those published by the UK government’s Office for Standards in Education, known as ‘Ofsted reports’. Keep in mind that state schools give preference to children living in the school’s catchment area so your school choice may influence where you live, or vice versa.

The fees for private or international schools are usually published on the school’s website and are generally very high, making thorough research and planning even more important if you’re going this route.

3. There are cost-effective transport options

The public transport system in the UK is efficient and cheap and can be considered as an alternative to owning a car. Even outside of London, many people find bus and train services meet their needs adequately, with various options of reasonably priced car rental available when needed, for example for holidays.

If you prefer the flexibility of owning a car, you’ll find that cars are on the whole less expensive to buy in the UK, and with their stringent car safety checks, you can pick up a good quality second hand one easily. Buying a car may be more cost-effective and less effort than shipping yours from SA, which could cost around £3,868 (quote for shared container shipping, conversion of speedometer and rear fog lights, road tax and DVLA registration from ShipMyCar.co.uk).But on the other hand, as a newcomer to the UK, you may have to buy your car cash as it usually takes time for you to get the credit required.

4. Setting up your home doesn’t have to involve a big upfront outlay

Many expats say that they wish they’d been told beforehand not to bring any furniture – to save the shipping costs and get furniture in the UK cheaply, or even for free!

If you’re staying for the long term, you probably want to decorate your home to your taste, but instead of rushing your home décor decisions and ending up spending too much on items that may not be quite right, these options allow you to get the necessities at low cost, which you can then sell or give away later:

  • Charity shops, such as the British Heart Foundation, that offer good quality furniture at nominal prices.
  • Freecycle, an online countrywide platform for free appliances and furniture.
  • Local buy/sell/swap groups on Facebook.
  • IKEA, low cost Do-It-Yourself furniture store.

Before leaving: Make sure you tick these off

  • Bring your original paperwork:
    1. Marriage certificate
    2. Children’s unabridged birth certificates
    3. Any other legal documents
  • Get copies of all important documents certified in SA, it’s more difficult and can cost up to £200 pounds to do in the UK.
  • If you’ll be travelling on your SA passport, make sure it has a couple of years on it as it can take a while to get one from the UK.
  • If you are considering buying a car, get a letter reflecting your no claims bonus from the company that insured you in SA, this can help you get a lower rate in the UK.
  • Bring letters from your doctor and test results for all your past medical history and for ongoing treatment in the UK.
  • Change your banking OTP (one time password) to email if you want to continue doing internet banking using your SA account. Alternatively, you could get a UK sim card beforehand and change your OTP to your UK number.
  • Do research on the type of job you might apply for as, while not the norm, a number of people have been asked to provide SA police clearance during their job application, specifically for roles working with children, vulnerable adults, etc.

When you arrive: Get set up

For a relatively low fee, service providers, such as First Contact, can assist you with your basic set up (bank account, national insurance and mobile numbers), potentially even before you leave SA.

This inside info from those of us who learnt the hard way can help you can navigate it with more ease:

Getting a job

If you don’t already have a job, these points from SA expats who’ve successfully found work in the UK could help:

  • The job market is dominated by recruiters who primarily use LinkedIn to find and filter applicants. Make sure your LinkedIn profile is updated and matches your CV.
  • Prepare a short two-page CV and include keywords that are relevant to the jobs you apply for.
  • Be willing to accept a temp job as it allows you to get UK experience, which is often valued more than experience with unknown SA companies. Temp jobs may also become or lead to permanent opportunities.

 

Move into your home

Renting a home is relatively straightforward for British citizens and anyone on an employer-sponsored visa. If you’re not, it can be challenging getting a rental agreement in your name, rental agents need to do:

  • Credit checks, usually a three-year history is required and agents will do international (SA) credit checks too, if you do not have the full UK history required.
  • ‘Right to rent’ (visas, residency permits) checks on all adults who will be living in the house and the required documents must be signed in person at the agency.
  • Affordability checks on the person/people listed on the rental agreement.

You can expect to pay administrative and processing fees, including fees for any additional people living in the house who are not listed on the agreement. Visit the UK government website for more information on renting.

Other associated living costs are:

  • Council tax: you’ll need to register with your local council. Do this as soon as possible as your council tax bill can be used as proof of address. Pay your bill on time to avoid the council requiring you to make an annual upfront payment.
  • Water, electricity and gas: these utilities are provided by private companies. The previous tenants should have notified their provider of their move and closed their account. You’ll automatically continue with the same provider unless you change. It is worth checking whether better options, cheaper deals or more sustainable providers, are available. If you decide to change providers, you will be billed, and the bill sent via the post, for the period since you moved in until you close the account.  Remember to take meter readings when you move in. This will help make sure you don’t pay for the previous tenant’s bills

In the South of England another consideration is the hardness of the water. Hard water contains high concentrations of ions, specifically calcium and magnesium. While not harmful, the hard water in the South of the UK can dry the skin and hair and can damage kitchen appliances. Not all homes have water softeners installed, and if you want one you’ll need to get agreement from the landlord and potentially carry some of the costs.

Renting is expensive in the UK but many expats struggle to get a home loan due to stringent credit requirements. There are companies that specialise in assisting immigrants with getting a mortgage, which can shorten the period before you are able to own your own home.

Setting up your bank account

Most banks offer low cost (fee-free) basic account options, usually with no credit initially. Many banks ask for proof of address (specifically for non-British, non-EU passport holders) and quite a few need original documents. You can use your council tax or utilities bill (if originals are needed you can request this from the council or utility). If you find a bank that doesn’t require the originals, keep in mind that you will usually still have to print out hard copies of your digital documents as most banks will not accept email versions.

Some advantages of UK bank accounts is that transfers and payments reflect almost immediately and cash withdrawals from most ATMs (called cash machines) are free.

Getting connected

There are a variety of service providers to choose from but the options are narrower for recent expats as a credit history is usually a requirement for getting a contract, even a sim only one. You may be able to sidestep this if you already have a UK account by the time you move. Alternatively, you can get a pay as you go sim or a monthly top up.

Pay the correct tax

If you did not receive your NI number with your visa (check the back of your biometric residence permit), get your NI number as soon as possible so that you do not pay provisional tax, which may be higher or lower than your actual tax rate.

In the UK, it’s not strictly necessary to file a personal tax return, but if you arrive during a tax year you may want to file for your first year.

As in South Africa, the UK government encourages saving for retirement through tax deductions on money you put into your ‘pension pot’. Check with your employer what the options are via ‘salary sacrifice’, which is when your contribution is deducted before your salary is paid out, and is the most efficient way to save. This does lower your take-home pay though, which could affect affordability checks, for example, when renting or buying property. You can also save into a pension fund with your after tax money to get the tax benefits.

Getting around

If you’ll be using train services regularly, check your local area provider for season tickets and specials. You can use your contactless bank card for the tube in central London, or get and top up an Oyster card. Remember to use the same card when you swipe in and out or you may end up paying more than you should.

Some London commuters drive to train stations on the outskirts of London and take the tube from there because parking in the city is generally prohibitively expensive. Even if your company provides parking, London traffic is a deterrent for many would-be drivers who prefer to make the swap to foot traffic on the trains and tubes.

Another option is one of the various car sharing services or networks now available, such as Zipcar. According to their research, published in January 2016, the average London driver spends around £3,436 per year over and above the cost of buying a car. Car sharing allows you more of the flexibility of owning a car, while sharing the typical car costs, such as road tax, maintenance, insurance, petrol and parking, as well as the car’s depreciation over the year.

Whether you’ll be primarily be driving or using public transport, if you want to be able to drive, your SA licence will be valid for the first 12 months. Thereafter you’ll need to apply for a UK driver’s licence.  

Getting help

Medical care with the NHS (National Health Service) is free in the UK. Once you’ve moved into your home, you’ll need to register with your local NHS GP practice. Remember to bring proof of your address, your council tax or utilities bill will work. The NHS covers GP visits, any specialist visits and diagnostic procedures. You still need to cover medication, dental and optician visits.

As one SA expat has found, you could get your monthly chronic medication prescription filled online and it may work out cheaper than paying per script. Also ask your GP about free pain and fever medication for kids, such as paracetamol and ibuprofen.

Private medical aid is available in the UK, with different benefits and costs, which can include emergency care and dental cover.

You can get Child Benefit if you’re responsible for one or more children under 16 (or under 20 if they stay in approved education or training). There’s no limit to how many children you can claim for but only one person claim per child. If you, or your partner earn more than £50 000 per year, you may have to pay a tax charge on the benefit.

You should still fill in the claim form, even if you don’t want to get the benefits as it will help you get National Insurance credits that count towards your State Pension, and your child will be registered to get a National Insurance number when they’re 16 years old.

Getting credit

One of the big challenges SA expats face is getting credit, specifically for car or home purchases, but sometimes even for cell phone contracts. Without a UK credit history most banks won’t extend credit at all. Some companies may extend credit, but at exorbitant interest rates. Expats who’ve been through the credit struggle had these tips to share:

  • Register as a voter. As a UK resident you’re allowed to vote and aside from the civic duty of voting, being registered improves your credit score. You will need proof of address, again you can use your council or utilities bill.
  • Bring your SA credit card with you to use for a while until you are able to get credit in the UK.
  • You can check your own credit score with one of the credit checking companies, e.g. Experian.
  • Do not apply for a credit card if you know your score is not high enough, or if you have already been turned down. Each refused application lowers your score.
  • After a few months there are a few companies that will offer you a ‘starter’ credit card. It’s a good idea to accept this, use it but pay in full (not just the amount due) every month in order to build up a good history. While this can improve your score, if you do not pay in full every month you risk both expensive interest rates and negatively impacting your credit history.

Transferring money between SA and the UK

Transferring money between countries can work out costly due to different exchange rates being applied as well as transaction costs. You don’t have to use your SA bank for transfers. Shop around for banks that will do this for you via deducting from one bank account and paying into the other. Many UK banks and other financial service providers offer better exchange rates and lower transfer fees than South African banks.

General: Tips to help you transition

Learning the norms and ways of a new country is an exciting part of moving, but can take time, and can sometimes add to an already stressful change. SA expats who’ve done the legwork had these suggestions:

  • Accept that the UK is still largely paper and post-based. The postal system is very efficient, with up to same-day postage, but you may need to find your local print shop or buy a home printer.
  • Companies often quote in annual rather than monthly figures. Look out for annual figures for items such as insurance, electricity, water, etc.
  • You can get loyalty cards and find reduced items at various supermarkets and there are apps (e.g. My Supermarket) that can help you find the best prices.
  • Be prepared for the costs of eating out, especially in London. Once you’ve moved over the best bet is eating in as much as possible, and not converting to rands when you do go out.
  • If you use a booking app for train tickets (e.g. Trainline), remember that you must have the credit card used for the booking to get your tickets. Trainline sometimes allows one concession per user, but at their discretion, so safest is to always book with the card you’ll have with you when travelling.
  • Become a member of the National Trust. Membership gets you free or lower cost entry to an array of parks and heritage sites countrywide.
  • If you get homesick for biltong, boerewors, Mrs Ball’s chutney, Zoo biscuits, Kola Tonic, green Cream Soda, Pronutro, Ouma’s rusks, Ghost pops, NikNaks, Mielie Pap, Lipice, etc, there are many SA shops all over the country and probably a stall at every market. And although not the same, try Green Giant cream-style corn as a close replacement for South African sweetcorn.

In line with the warmth and generosity South Africans are known for, many of the tips, tricks, advice and suggestions have been provided by South African expats, via the Facebook group South Africans (Saffas) in the UK.

Look out for our next article: Getting to grips with saving and investing in the UK With a much bigger market in the UK than in SA, and products that work quite differently from what you may be familiar with, many expats have fallen into the trap of delaying restarting their financial plans. We’ll unpack the complexity and help you get set up for your financial future.

  • Matthew Young, Alexander Beard Wealth LLP
  • This content is brought to you by Orbis Investments
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