Financial Perspectives

Whilst I haven’t had to sell my home in the UK, the rise in interest rates has landed large numbers of people in the situation where they have loads of equity in their house but not enough money to pay the mortgage on it.

You can end up in that situation extremely quickly so it’s often the case that you find one month you can cope and the next you can’t. If that’s happened, then you need to do something about getting cash quickly.

Likewise, if your house has been sitting on the market for a while and you’re now living somewhere else, you can easily find that you need to get the money fast.

If this has happened there are now a number of outfits that will buy your house in as little as seven days. Yes, just a week!

For historic reasons, the various post offices and co-operative banking organisations in Europe maintain loose connections with their opposite numbers in other countries and it’s therefore often useful to open accounts with these organisations before you move.

For instance, the co-operative bank offer a service called Tipanet which offers quite cheap international money transfers: around £8 as compared to the £25 that a normal bank would charge you. In the UK, it’s the Co-Operative Bank that does this, in France it’s Banque Populaire. The co-operative movement is quite frequently used by various unions and in France Banque Populaire offers special deals to public servants.

The post office links are even more widespread and various special arrangements exist between considerable numbers of national post offices for their account holders. However, information on these isn’t widely distributed and it can take a little searching to find out about them. One advantage that almost all give you is that a post office account effectively gives you government issued proof of address once your first statement arrives.

Offshore banks are banks that operate in various tax havens around the world. The most familiar in the UK are the Channel Islands and the Isle of Mann but there are many based in small islands in the Carribbean.

If you’re moving abroad, it can be useful to have an account with one of these banks both to simplify your taxes a little and for the additional services that many of them offer to the expat community. None of the legitimate centres offer taxfree interest on your accounts these days but offer you two options for the interest on your accounts: 1) a withholding tax roughly equivalent to the tax that you would normally pay in your country of residence and 2) no tax but they report your income to the authorities in your country of residence.

Although no longer taxfree, the additional services that many of these banks offer can still make them worthwhile. Even the simplest of them are much more familiar with international bank transfers than a normal high street bank could be expected to be but most go beyond that offering multi-currency accounts, debit cards in a range of currencies and often expat advisory services.

On the whole, the range of services on offer increases in proportion to the increase in the minimum income that the banks ask for. A reasonable compromise with this seems to be Abbey International which offers accounts and debit cards in pounds, euro and dollars for an opening balance of £5000. If your needs are more modest, try the Co-Operative Bank in Guernsey (under Current Accounts, Offshore Banking).

Most people will think of Switzerland in terms of “offshore” banking, but is there anything special about it? The banks there are generally more aware of the needs of international clients but this generally comes at a price. By and large, unless you have fairly sizeable amounts of money (say £25,000 upwards) to deposit or invest, they probably aren’t worth it. Sadly, the Swiss Post Office no longer offers its excellent Yellow Account outside Switzerland (despite what you’ll read on some of the “open a Swiss account” sites).

We’ve included a list of the main banks operating in this arena in the directory which should let you choose the perfect combination of prices and services for you.