Many Americans moving to London will be moving as part of a relocation jobs package. Multi-national companies often move their employees around the world to give them the opportunity of gaining valuable experience in foreign markets. If you are negotiating your relocation to London with your employers you will have to pay close attention to the financial package that you are being offered.
Relocation Jobs – The value of money
While it makes sense to still get paid in dollars from a taxation perspective, you will be spending your salary in pounds. You will be subject to foreign exchange markets and even a small fluctuation can make a big difference to your bank balance.
It might sound easy after your relocation to London to just continue using your American credit cards and withdrawing cash from the ATM when you need it. All of the UK has moved over to the “Chip and Pin” system of identification when paying for a purchase with a debit or credit card. All of the equipment has been changed to only accept these types of cards, and the last thing you want to do is have your newsagent have to ring up the bank for authorization for a pint of milk. Banks charges will be significantly higher and you will be charged a Forex commission on each transaction. You can easily pay double or even three times the amount of bank charges if you use an American credit card in the UK.
If you are moving to London for anything longer than about three months, you should consider getting a British bank account for your daily purchases, living expenses and monthly bills. Having a bank account will also help to establish your credit rating which is necessary if you want to get a cell phone contract or store account.
Professional relocation services companies understand how hard it can be to open a bank account and will be able to advise you on the procedure and what you will need. They may even e able to help you open a bank account before you arrive.
If you do have a British bank account after your relocation you have a responsibility to report it on your American tax return each year.