Introduction
This is going to be the most interesting part of your relocation. The way the English deal with money can be frustrating but in the end you will see the funny side!
The first thing you will notice is that you will need credit references and a credit history. This is not easy to get but being resourceful South Africans, there are ways around this issue. The big thing is that they want to know that you have been in the country for at least 3 years before they will give you any money!
Banks
Choosing the right bank can save you a lot of frustration. When we arrived in the UK we unfortunately chose the wrong bank and got caught up in a tangle of bureaucracy. Thankfully we have changed banks and are now very happy.
Before you go to a bank to open an account the following documents will be useful:
- 3 months of statements from your last bank in SA.
- A reference letter from your bank describing the facilities you had with them
- A letter of appointment or a letter from an agent stating that you are seeking employment
- Passport
- Lease agreement or council tax bill
Some banks then send a letter back to your bank asking for confirmation that you had an account with them - it is required by law to do so! If this happens try and get them to courier it and then phone the bank back home and ask them to courier it back otherwise you could wait up to month to get a bank account opened!
To start with you will receive a cheque account with a debit card (or Switch card as they call it). Don't bother applying for a credit card immediately as they will more than likely refuse it for at least the first six months!
Banks provide a free service for cheque accounts. That means that no charges occur for writing cheques, withdrawals (from their ATM's) and deposits. If however you overdraw or bounce a cheque, the cost is high (£30 for a bounced cheque!).
Once you have the account you should try to get a nominal overdraft to start establishing your credit rating. After three months you should be applying for a credit card to further increase your rating.
Tax
There are 3 types of taxes in the UK:
- VAT
- Income tax
- Council Tax
VAT: This is currently 17.25% and all prices displayed in shops will be tax inclusive. There are exemptions to VAT like books and education materials.
Income Tax: You will have to have a National Insurance Number before you begin work (see below). This is used in a number of ways of which one is your income tax number.
Only people earning over £28,000 a year have to fill in a tax return but anyone who wishes to fill one in can do so. All you need to do is to contact your tax office and request the forms. The basic rate varies from 10% to a maximum of 40% with an average of about 30%
Council Tax: No matter where you live in the UK, you will get a council tax bill. This is worked out on the value of the property that you own or rent and the location of it. It is due monthly but you can pay it quarterly. This tax is used to maintain the village, town or city you live in and it pays for refuse removal, policing, ambulance services and general administration.
National Insurance
National Insurance (NI) is payable by everyone working. This covers the cost of health care (Called the NHS or National Health Service) and if you are a British Citizen, it also entitles you to a number of state benefits like a pension.
You will need to get a National Insurance number from the Department of Social Services (DSS). In order to obtain it, you will need a number of forms of identification. These include:
- Your Passport
- A letter of appointment or a letter from an agent stating that you are seeking employment
- 2 x Proof Of Address in the form of a Lease agreement, council tax bill or telephone bill
The process usually entails filling in a form and having an interview. They will then give you a temporary NI number until your unique number is processed and given to you. This comes in the form of a credit card sized National Insurance Identification.
Other Insurance
Compared to South Africa the insurance here is not a rip off! The typical Household insurance is between £100 to £125 a year (No! not a month like back home). This is due to the lower crime rate. It is advisable to take out insurance which is paid up front for the year.
Remember that Car Insurance is compulsory in the UK. Again depending on the car, the cost of insurance will be between £100 and £200. It is advisable to get a letter stating your non-claim bonus before you leave for England as this will drop the price by quite a bit.
Phone around. You will be amazed at the competitive rates that you will get. Most insurance houses will sign you up over the phone.
