Aussies are no exception to this day to day activity. In this article, we’ll review ways of sending money from Australia to the UK. Let’s get started.
Did you know that the UK is among the most popular money transfer destinations for Aussies? Well, according to a study in 2016, the UK (as a destination) makes up over 20% of the money transfers from Australia. This figure translates to over $350 million annually on average.
There are very many ways to go about this transfer, and we shall highlight some of the popular and most effective ones. Your choice will depend on the one available in your region, affordability, and transfer time, amongst many other factors.
Best ways to send money to the UK
The most commonly used transfer options to send money to the UK are:
- Online money transfer providers/platforms
- Bank transfers
- International Money Orders
- Cash transfers
Online Money Transfer platforms
This method requires signing up & creating an account with an online money transfer company. The funds are sent over the internet to the recipient’s account. Apart from being fast and cheap, this option is preferred since it is reliable. Note that for the transfer to be successful, you need the recipient’s details.
Several companies offer online money transfer service. As such, you may need to compare their charges, transfer time, and limits. Money transfer providers also have flexible transfer options, such as forward contracts and limits orders. PayPal is another fast and convenient online money transfer platform.
So long as you and the recipient both have PayPal accounts, you can transact funds hassle-free. However, you will need to link a credit card or bank account to your PayPal to cater for transaction charges. PayPal fees are based on the percentage of the transaction amount and the funding method.
You can also use an online money exchange marketplace. In Australia, you can use CurrencyFair.
CurrencyFair is an online P2P marketplace that allows for currency exchange. It is headquartered in Ireland but has offices in other regions, including the UK, Singapore, and Australia. The ASIC regulates CurrencyFair, and your funds are securely held in Tier 1 international banks.
CurrencyFair supports over 20 currencies, including AUD and GBP. As the platform is based on a peer to peer approach, the funds involved don’t cross borders, and therefore you don’t incur bank charges.
Here is how to go about sending money from Australia to the UK using CurrencyFair.
First, open an account with CurrencyFair. Complete your profile by filling out all the details. Once your account has been verified, you can enjoy the transaction services.
Proceed to fill the amount you wish to transact, the currency you want to exchange to, and the necessary recipient’s bank account details. You can fund your account through BPay or bank transfer.
CurrencyFair then exchanges the funds at the best rates before forwarding the money to the recipients. The recipient can then pick up the funds from their account. This option is cheaper than transfers via banks.
You can compare the exchange rate on the platform before sending the money. At the time of writing the rate stood as illustrated below:
If the amount you wish send is $1000.00 (AUD) the recipients will receive £494.70 (GBP)
The exchange rate, therefore, is 1 AUD = 0.4970 GBP. Note that a £2.50 fee is charged.
Another option you could use is TransferWise.
TransferWise is a financial institution that focuses on electronic money transfer. It is licensed in Australia and regulated by the Australian Securities and Investment Commission. TransferWise is fast and also secure, so you don’t have to worry about getting defrauded.
TransferWise holds your funds in low-risk financial institutions as stipulated by the law. In Europe, the money is held in the UK account with Barclays. In the US, the funds are similarly held in the US account with Wells Fargo.
At the time of writing, the rate was as illustrated:
If you amount you wish to send is $1000 (AUD) the recipient will receive £497.26 (GBP)
The exchange rate, therefore, is 1 AUD = 0.5001 GBP. Note that a fee of 5.68 AUD is charged.
If you are not comfortable sending money through online money transfer companies, you can opt for direct bank transfers. Here you send the fund directly from your local Australian bank account to an overseas bank account (the recipient’s account).
This option typically takes longer than online money transfers. Furthermore, you are likely to incur very high inter-bank transfer charges. The transfer may also be subject to other bank fees and unfavorable exchange rates.
If you decide to go the bank way, it is recommended you use a multi-national one that offers accounts explicitly tailored for international transfers.
What you’ll need for bank transfer?
For a bank transfer, here is some of the information you may be required to provide:
- Your name
- Your address
- Phone number
- Your bank account number
- The recipient’s name
- The recipient’s address
- Currency choice (GBP)
Overseas Bank Account details
- Bank’s name
- Branch address
- Bank sort code
- Recipient international bank account number
You are probably wondering how this one is possible. This option lets you send funds from Australia to overseas destinations (the UK, in our case), where the recipient will pick it up in the form of physical cash from a local transfer company office.
It is ideal when the recipient lacks a bank account or doesn’t know how to go about the online money transfer. On the downside, this method is relatively expensive.
International Money Order
Another way to send money to the UK is by using an international cheque. All you have to do is purchase the cheque at your local bank and then forward it. The sum of money you intend to send us debited from your bank account.
This method is secure and reliable. Once the recipient has the cheque, he/she can cash it or simply deposit that sum into his/her bank account. Relative to other methods, IMOs can be slow and also cost more.
How long does an international money transfer to the UK take?
Transfers don’t take specific time intervals. Also, depending on the method you choose, the transfer time will be varying. On average, the transfer of money from Australia to the UK takes 1 to 5 business days.
Note that factors such as time zone, bank cut-off times, weekends/holidays, and currency involved may affect the transfer time.
How do online money transfers happen?
To send money through an online money transfer company, you need to have an account with that company. If you don’t have one, you will be required to create an account. Don’t worry, it is not a challenging task.
Visit the company’s website and register/open an account. Mae sure the company you choose supports the transfer of money from Australia to the UK. Some of the details you will need when opening the account include your name, email address, and documents to support your ID.
Some online money transfer companies will need to verify your account information before you make a transaction.
Once your account is set-up and verification is done, you can start making transactions. Submit the recipient’s details and the amount you would like to send. You will also need to choose the currency in which you want to send the money.
You will be informed how much the transaction will cost you, and once you have agreed to the transfer fee, the transaction will be done. It is worth noting that some companies may have receiving fees in the form of processing fees and currency exchange rates.
How much will it cost to make my international money transfer?
Various transfer options will charge you differently for a money transfer from Australia to the UK. The charges can be grouped as:
These apply when converting currencies i.e. Australian Dollar to the British Pound. A better exchange rate will mean the recipient receives more British pounds in their account. Companies and institutions that offer a better exchange rate oftentimes charge the transfer fee separately as a business strategy.
The transfer fee is simply the cost of carrying out the transaction. It ranges widely depending on the institution. Some institutions charge a fixed fee, whereas other charges a percentage of the amount you are sending. Others offer fee-free transactions but provide a poor exchange rate.
Other hidden fees:
Hidden fees refer to any other you or the recipient may incur as a result of the transactions. When choosing a transfer method, always look out for these fees as they may make the overall transaction cost much higher than you expected. The recipient should also be aware of these charges to avoid surprises. Hidden fees include bank intermediary or receiving fees.
Banks vs. money transfer companies
Sending money using the bank is convenient and seems logical from most angles. After all, it is the institution that you trust with your finances. However, sometimes it is not always the best choice.
For one, banks have exchange rates that are lower than the mid-market rates. This is because they levy big margins on top of the foreign currency they sell. Secondly, banks generally charge hefty transaction fees for international money transfers compared to other options.
You can get better exchange rates and low transfer fees using online money transfer companies. In the long run, you will be able to enjoy savings when sending money to overseas destinations (UK).
How to compare transfer companies when sending money between Australia and the UK
It is crucial to compare money transfer companies that allow you to send money from Australia to the UK to get one that offers the best deal and also meets your needs. Here are some factors to consider when making the comparisons:
- Exchange rates
- The currency choices you want are available
- Fees charged
- Transfer options
- Transfer (turnaround) time
- Pick up locations
- The responsiveness and reliability of customer services
Limits & Tax regulations on money transfers to the UK
Essentially, there is no limit on the amount of money you can send from Australia to the United Kingdom. That said, there may still be a restriction on the amount you can send in a single transaction. Some money transfer companies and banks have this limit, but others don’t.
The funds transferred may also be subject to taxes depending on the status of the recipient. Generally, non-residents in the UK are usually not subject to tax on money sent to them. Residents, on the other hand, may be subject to taxes. It is advisable to consult a tax professional, especially if you intend to send large sums of money from Australia to the UK.