Financial Perspectives

Even if you are intending to live the rest of your life in France, you should resist the temptation to close any UK bank accounts or credit cards. The only exception to this is, possibly, for those accounts/cards which have an annual fee.

In addition to the accounts which you already have, you may find it useful to open others as the international dimension changes how you use accounts. For instance, if you have a holiday home in France you’ll obviously be transferring money from pounds into euros much more than you were previously.

The range of accounts in the UK is massive and therefore we can only give an indication of those that you might find useful here.

The Nationwide Building Society Flexaccount (cheque account) is a must. It gives you entirely free transfers from pounds to euro and, at the moment, is the only truly free currency exchange service. Their credit card comes close behind with free exchange on purchases although it has competitors now in the form of Abbey’s Zero card and the Post Office credit card (NOT their “0% commission” deals as they actually cost almost 4%).

Beyond that, if you are going to live in France, it’s useful to open credit cards with a number of card issuers. In general, you will not be able to do this if you are living in France and neither can you easily get credit facilities in France so it’s useful to have a number of UK cards as a fallback should you need it. The main issuers are Capital One, the Co-Operative, GE, Halifax, HSBC, LloydsTSB, MBNA, Nationwide and Royal Bank of Scotland (most other cards are rebranded versions of these eg Sainsbury is really Halifax). It’s worth getting an American Express credit card too as you can transfer the account to France, although as the charges in France are considerably higher you may not want to do that right away.

Cheque accounts are also useful to have. If you qualify for the HSBC Premier service, they’ll open an equivalent account with HSBC France for you which has the additional advantage that you get free transfers between your UK and French accounts with them. Barclays and LloydsTSB offer a similar (but more expensive) service though their branches are largely confined to Paris and the Cote d’Azur. The Barclays account offers withdrawals with no transaction charge at BNP-Paribas machines in France (you are still charged 2.75% on the exchange rate). I used to recommend Citibank a lot but they have increased their charges substantially and it’s not as clearly a useful account for expats as it once was.

The Nationwide account is excellent if you are in France and need to transfer relatively small amounts of money from the UK but the £300 per day (about €400) limit means that it’s not practical for large amounts such as for your house purchase. You can use your own bank for this but the charges are generally quite high and the exchange rate isn’t particularly good either in most cases. To transfer more than a few thousand euros you are best to open an account with one of the specialist companies such as moneybookers; if you are going to be making regular transfers (eg paying for a French mortgage from a UK account) then HIFX offers a facility for this. Slightly more convoluted is by way of a UK Halifax cheque account to the equivalent account with Halifax in Spain which offers free transfers to Spain and from there you can transfer the money very cheaply to France (or any other Euro country).

If you are retaining your house in the UK as we recommend, then you will probably need to change the mortgage to a buy to let one. It’s best to do this before you leave the UK as there are a relatively small number of brokers who deal with overseas clients.

The field of investments in the UK is even wider than the range of banks. However, most seem prepared to change your address to an overseas one. However, if you don’t yet have a UK broker or similar it’s worthwhile opening an account with one before you leave as few will open accounts for overseas clients. We’ll cover it in more detail later but at this point it’s worth mentioning that having a SIPP (Self-invested personal pension) account open is also useful.

If you’ve not yet ventured into this arena, a few useful accounts to have are the Halifax sharebuilder (which lets you buy shares monthly), Fidelity’s Funds Marketplace (which lets you buy numerous unit trusts) and TD Waterhouse brokerage. All are free to open.

As always, you can find links to sites we have mentioned in the Foreign Perspectives directory along with other similar outfits which we haven’t had the space to mention here and the reference version of this entry on our emmigrating to France pages is more complete.

Although you can open offshore bank accounts after you leave, it’s best to open your choice from the above before you leave the UK as it can be difficult or even impossible to do it after you leave.

International banking raises issues that rarely arise when you confine your transactions to one country.

If you are moving to France to live, you might think that you may as well either close or at least tidy up your finances at home before you leave. Resist this temptation! It can be much more difficult to open accounts when you are living in France and if you have closed everything you may find it virtually impossible to open any account in the UK.

The banking scene in France is completely different from that in the UK. Whereas there are the “big four” in the UK, France doesn’t really have any truly big banks and the majority of French “banks” are what would be considered relatively small regional building societies in the UK. As with small building societies, the range of products is quite limited.

I’ll be going through the various financial aspects of buying a house over the next few posts.

Many of the B&B and particularly gite owners accept payments by bank transfer to their account. What amazes me is that they never consider that it’s something of a risk to give your bank account details to a complete stranger and even more so when it’s a series of complete strangers.

If you think about this for a while you’ll realise that your bank account details are printed on your cheques but that’s not quite the same as you give cheques to people or organisations that you know. There is a safe way to do this though. Just quote a savings account number and, if you’re really paranoid about it, open a savings account in a bank that you don’t normally deal with.

Every time that I raise this issue, someone quotes their bank manager as having said that it’s perfectly safe to hand out your details in this way and that it’s impossible to take money out using only those details. Haven’t these people even heard of direct debits? After all, a direct debit uses exactly the same information as you quote to receive money.

Now, I’m not suggesting that a fraudster is going to set up a direct debit and then withdraw money from your account using it (although that has been done in some cases) but there are a number of very similar ways to do that. For example, if you care to give me your bank details, I could set up a one-off transfer by simply looking up the address of your bank and faxing them the instructions to do that. You might think that wouldn’t work as they check the signatures, but actually they only check a small percentage of the signatures so it almost certainly would work.

Then people say that it must be safe because the electicity company quotes their details for payments so how come someone hasn’t cleaned them out by now? They haven’t because they quote the number of their collection account and collection accounts reject electronic withdrawals.

Since a small business doesn’t have the option of a collection account the safest thing to do is to quote a savings account number as you can’t withdraw money electronically from a savings account.