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International doctors: a guide to managing your money

11 January 2023

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Financial adviserGreg Poveyoffers practical financial advice for GPs who are newly arrived to the UK

Starting a new job in a different country is a daunting but exciting time. We know how valued doctors from around the world are to the UK. To help you make the move to your new home country as smooth as possible, here are some essential points about how best to look after your finances.

Bank accounts

Firstly, you will need to set up a UK bank account, which your wages will be paid into. There are two main types of bank accounts to choose from, current accounts and savings accounts.

Current accounts are where money or cheques can be paid in or taken out at any time, so they are very useful for day-to-day spending. Your salary can be paid into the account and used to pay your bills or any other expenses. They can be a simple way to access and keep track of your money.  You can also use a debit card to take cash out from ATMs or to pay for things in shops.

Savings accounts, sometimes called deposit accounts, are accounts where money is saved for a period, with the bank paying you interest on your savings, though these will generally be quite small amounts. Savings accounts are useful for keeping any extra money safe but are usually less accessible than current accounts so can be less practical for day-to-day spending.

You can either open an account online or in person at your local branch in the UK as long as you have photographic ID and proof of address. Some banks will help you set up an account before you arrive in the UK so it’s worth getting in touch with providers ahead of time.

Cost of living and budgeting

The cost of living in the UK can vary depending on your lifestyle and where you live, with inner cities being the costliest. In central London you can expect to spend around £1,660 per month on rent, and would need a further £860 per month for living costs. 

Most doctors are paid monthly, so you’ll need to budget for regular outgoings, which will likely include rent or mortgage costs, electricity and gas, water, council tax, rent and other utilities like internet. On top of that you may have your own personal bills to factor in, such as General Medical Council fees, home insurance and car insurance.

After you’ve paid your bills, it’s a great idea to save some of your income for the future; around 20% to 30% if you can afford it. With the rest, divide it by 4.33 (the number of weeks per calendar month) to work out how much money you have left over to spend every week.

To cover short term expenses, or for additional security on some purchases, you may want to take out a credit card or bank loan, or for a house purchase you may want to get a mortgage. In all cases the lender will check your credit score. This is a measure of how reliable you are at borrowing and repaying money.

The better your score, the more money you will generally be able to borrow and the lower interest you will have to pay on the loan. You can find out what your credit score is by checking with a credit rating agency online, such as Equifax, Experian and TransUnion.

If you haven’t been in the UK long, you won’t have had much time to build up good credit, but there are things you can do to boost your score. One is being on the electoral register – the list of names and addresses of everyone who is registered to vote in the UK. This should be possible straight away if you are from the EU or a Commonwealth country. You can also build a better credit rating by paying your bills in full and on time. That could be a phone or utility bill that’s in your name.

And you could get a credit card or store card and then spend a small amount of money each month, ensuring you pay it off in full when your statement arrives. This means you won’t pay any interest charges and shows you can be trusted to pay back the money you have borrowed.

Sending money abroad from the UK

If you need to transfer money to friends or family back home, it’s worth doing your research first, because the fees and currency exchange rates on offer can vary considerably for different kinds of transfers. If you are planning on making regular transfers to one person, there are banks that offer free transfers, including certain HSBC accounts (as long as you are transferring money to another HSBC account) and State Bank of India UK.

For one-off transfers under £5,000, you may want to use one of the main currency exchange providers, like Wise, Currencies Direct or OFX. For larger amounts, a broker such as Currencies Direct or Global Reach may be a better option. 

It’s worth keeping in mind that there is no one provider who will always offer the cheapest rates, and it’s always a good idea to do research for each transaction to ensure you’re getting the best rate available.

Saving for retirement with a pension

Joining a good pension scheme as soon as you can and making regular contributions can help make sure you have a comfortable income after you retire. The good news is that the NHS offers a generous pension scheme.

You contribute between 5.1% and 13.5% of your gross salary, i.e. before tax and other deductions, and the NHS contributes another 20.68% (or 20.9% in Scotland). And you don’t have to pay income tax on any money you earn that you pay into your pension.

The amount of pension you will ultimately be paid is calculated based on your career average earnings. There’s no doubt that pensions can be a complicated topic and it’s always advisable to take financial advice before making any decisions.

Greg Povey is a specialist financial adviser at the Wesleyan Group.

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