7 practical financial tips if you’re an expat stuck in the UK or Australia during the pandemic

Category: News & United Kingdom

The pandemic has hit everyone hard. Lockdowns have been stressful with strict limits on movement and freedom. Additionally, restrictions on overseas travel have reduced your ability to see friends and family.

Even more so if you’re an expat, as you may be not living in your country of origin, and enduring an unplanned and extended stay in a different country.

Here are seven key financial issues for you to consider if you are an Aussie expat in the UK, or a British expat in the UK, waiting to go home.

1. Sort out your currency exchange arrangements

If you have money and other assets in both Australia and the UK, it’s likely that you’ll be transferring money between the two countries.

We would always recommend that you use a currency exchange specialist for this kind of transaction, particularly if large sums of money are involved.

A specialist will be able to get you a much better rate than you’d get at a standard high street or domestic bank branch.

They also have access to certain exchange instruments to help you time your purchases to maximise the amount you get for your dollars or pounds.

2. Ensure any property you’re renting is properly managed

If you haven’t already done so, make sure to use an experienced letting agent to look after any property you’re renting out.

Not only will they manage the finances on your behalf, but they will also be able to ensure the property is being well-maintained.

They can also handle any issues that arise regarding who you let the property to, and they are in the best position to ensure a continual flow of rental income if you need to let to new tenants.

3. Keep your tax affairs in order

It’s always important to keep your tax affairs in order and, if you’re staying away from home for longer than you might have planned, that’s even more the case.

Having financial arrangements in two different tax jurisdictions can create complications. Mistakes can prove costly and can often be irreversible.

As with currency exchange and property letting, we would strongly recommend that you engage the services of an expert to help you manage this.

A tax specialist will be able to advise you on residency matters, which will be important when it comes to ensuring you pay the correct amount of tax in both the UK and Australia.

The question of residency has been a real issue for some people during lockdown. They have effectively been “trapped” in another country and have therefore incurred a tax bill through no fault of their own.

4. Retirement planning

If you’re working, you should take the opportunity to maximise the amount you save into your pension in the UK or super in Australia.

This is particularly the case if you’re in the UK, where the government add tax relief to whatever you pay in. As a basic-rate taxpayer, every £100 you contribute to your pension only costs £80.

Higher- and additional-rate tax relief is also available.

Anyone over the age of 18 can contribute to a UK pension, even if they aren’t working. They will still get basic-rate tax relief, so it’s worth considering a pension as a savings vehicle for your spouse or partner.

5. Set aside some “end of the tunnel” money

You often hear about there being “light at the end of the tunnel” when it comes to lockdown and the end of the pandemic.

Australia does seem on track to hit the necessary vaccination targets by mid-2022 – even sooner if they are able to maintain the current rate of vaccinations.

This will enable Aussies to return home and Brits to leave Australia.

So, start setting aside some money for when this happens now. Clearly there’ll be expenses involved in your return travel, but beyond that, you might want to have a fund ready to treat yourself and your family when you get home.

6. Give yourself a financial health check

If you’re in a state of limbo and unable to plan too far ahead, now might be an ideal time to set aside a couple of hours to get your financial paperwork straight.

Here are some simple suggestions of things you could do:

  • Set up a simple income and expenditure spreadsheet
  • Check your direct debits and cancel any no longer used
  • Look through your recent bank statements for any discrepancies that need addressing
  • Create a calendar of renewal dates for things such as motor insurance
  • List all your pension and savings details and get up to date valuations.

By completing all of these – if you don’t already do them as a matter of course – you’ll have a clear idea of your financial position and planning ahead will be easier.

7. Set up an “ICE” file

A logical extension of the previous point is to set up an “In Case of Emergency” (ICE) file.

As the name suggests, this is a file on your computer or laptop where you collect together all the information that you may need in the event of an emergency.

One key point is that you should let other family members know where you’ve stored it, in case an accident or emergency happens, and you aren’t able to deal with it personally.

As well as financial information, you’ll also want to include insurance details, including policy numbers.

Also include a list of key emergency contacts.

Get in touch

At bdhSterling, we have a wealth of experience in helping clients with their financial planning.

Get in touch to find out how we can help you.