Financial Checklist for Newcomers: How to Settle Financially in the UK

Moving to a new country brings excitement and challenges, especially when it comes to managing your finances. If you’re relocating to the UK, having a clear financial roadmap can make your transition smoother and less stressful. This comprehensive checklist covers the essential financial steps you’ll need to take when settling in the UK.

Before You Arrive

Research Cost of Living

Understanding how far your money will go is crucial before making the move. UK living costs vary significantly by region, with London being considerably more expensive than other areas.

• Research average rent, utilities, groceries, and transportation costs in your specific destination

• Use cost comparison tools to compare your current location with your UK destination

• Factor in council tax, which varies by property and location

Understand the UK Tax System

The UK has a Pay As You Earn (PAYE) system for income tax and uses tax codes to determine how much tax is deducted from your salary.

• Learn about UK tax years (April 6 to April 5)

• Familiarise yourself with income tax bands and the personal allowance

• Check if you need to complete a Self Assessment tax return

Plan Your Initial Budget

Arriving with sufficient funds to cover your first few months is essential.

• Budget for temporary accommodation if needed

• Plan for security deposits (typically 5 weeks’ rent)

• Include set-up costs for utilities and home essentials

• Factor in initial transportation expenses

First Priority: Banking

Opening a UK Bank Account

This should be one of your first priorities upon arrival.

• Research traditional and digital banks—traditional banks may require more documentation but offer branch services; digital banks like Monzo, Starling, or Revolut may provide quicker setup

• Prepare necessary documentation:

  • • Passport or ID
    • Proof of UK address (utility bill, tenancy agreement)
    • Proof of immigration status

• If you’re struggling to provide proof of address, some banks offer accounts specifically for international customers

Money Transfer Services

Until your UK bank account is active, you’ll need ways to access your money.

• Research international money transfer services with favorable exchange rates (Wise, Revolut, XE)

• Consider keeping a bank card from your home country as backup

Essential Setup Steps

National Insurance Number

Your National Insurance (NI) number is crucial for working and paying tax in the UK.

• Apply for your NI number as soon as possible

• You can start working before receiving your number, but you must have applied

• Your employer will use a temporary tax code until your NI number is assigned

Housing and Utilities

When securing accommodation:

• Budget for deposit protection schemes

• Set up direct debits for rent and utility payments

• Shop around for utility providers—comparison sites can help you find the best deals

• Register for council tax in your local area (students may be exempt)

Healthcare Financial Planning

The National Health Service (NHS) provides free healthcare, but there are financial aspects to consider.

• If you’re on a visa, check if you’ve paid the Immigration Health Surcharge

• Register with a local GP as soon as possible

• Budget for prescription costs (currently £9.90 per item in England)

• Consider dental payment plans, as NHS dental care has charges

Building Your Financial Foundation

Employment and Income

Understanding your employment rights and pay is essential.

• Ensure you have the right to work in the UK

• Check your employment contract for salary, pension contributions, and benefits

• Understand statutory benefits like sick pay and holiday entitlement

• If self-employed, research your tax obligations and necessary registrations

Building a Credit History

UK credit history doesn’t transfer from other countries, so you’ll need to build it from scratch.

• Register on the electoral roll if eligible

• Consider credit-building products like Loqbox or a secured credit card

• Pay bills on time and maintain good financial habits

• Use services that report to credit reference agencies

Pension Planning

The UK has automatic enrollment for workplace pensions.

• Understand your workplace pension scheme

• Check contribution rates from both you and your employer

• Consider additional voluntary contributions if appropriate

• Research how UK pensions differ from retirement plans in your home country

Protecting Your Finances

Insurance Considerations

Certain types of insurance are essential or legally required in the UK.

• Contents insurance for your belongings

• Building insurance (if you own property)

• Car insurance (mandatory if you own a vehicle)

• Life and income protection insurance as needed

Emergency Fund

Building a safety net is crucial when living in a new country.

• Aim to save 3-6 months of essential expenses

• Keep this money in an easily accessible savings account

• Research and compare interest rates for savings accounts

Long-term Financial Planning

Understanding ISAs and Tax-Efficient Saving

Individual Savings Accounts (ISAs) offer tax advantages for UK residents.

• Cash ISAs for savings

• Stocks and Shares ISAs for investments

• Lifetime ISAs for first-time home buyers or retirement

Property Considerations

If you’re planning to stay long-term:

• Research Help to Buy schemes for first-time buyers

• Understand the UK mortgage market and how residency affects eligibility

• Learn about stamp duty and other property taxes

Useful Resources

• Citizens Advice Bureau offers free financial guidance

• Money Helper (formerly Money Advice Service) provides free money management tools

• Your local council website for information on local services and payments

• HMRC website for tax information

• Financial Conduct Authority’s register to check if financial advisers are legitimate

Final Tips

• Keep detailed records of all financial transactions and documents

• Stay informed about changes to UK financial regulations that may affect you

• Consider seeking advice from financial advisers specialized in expatriate finances

• Connect with community groups for newcomers who can share practical advice

By following this checklist, you’ll be well on your way to establishing a solid financial foundation in the UK. Remember that financial systems vary by country, so give yourself time to adjust and learn. With proper planning and information, you can navigate the UK’s financial landscape with confidence.
Download the Hyfa Foundation Pocket Guide to Moving to the UK for more help with housing, healthcare, and employment.