What to do with UK money?

[ADAVIDH]

I have a fairly large sum of money sitting in the UK. I managed to get some of it over before Brexit but there's some sitting in an ironically-named high interest savings accounts at Natwest. Last time I checked the interest was about 0.5%. As I am no longer a UK resident, my options are limited. I don't want to transfer it to AUD as the exchange rate is so bad. I considered setting up a GBP account here in Australia to purchase some securities but I am wondering if there are other options out that I have not thought of yet. Does anyone have any ideas how to invest the cash so I can achieve a better return on investment than 0.5%?

[Keith and Linda]

I have a fairly large sum of money sitting in the UK. I managed to get some of it over before Brexit but there's some sitting in an ironically-named high interest savings accounts at Natwest. Last time I checked the interest was about 0.5%. As I am no longer a UK resident, my options are limited. I don't want to transfer it to AUD as the exchange rate is so bad. I considered setting up a GBP account here in Australia to purchase some securities but I am wondering if there are other options out that I have not thought of yet. Does anyone have any ideas how to invest the cash so I can achieve a better return on investment than 0.5%?

 

Premium bonds? not a guaranteed return but it did ok for me until we bought a house which is now rented out for a far far better return.

[ADAVIDH]

Thanks for the reply Keith and Linda. Looks like the 'prizes' are 1.15% from May 2017 which is better than what I get at Natwest but not huge. I was looking for something with a guaranteed higher return but your reply is appreciated.

[northshorepom]

It's difficult to open accounts in the UK if you're not resident but not impossible. Maybe you can do better than 0.5% by shopping around

 

I fear your options are limited unless you want to use it to invest in other things with a higher risk (like shares) to try and get a better return. As a cash deposit you're pretty stuck. Any GBP account will have the same interest rate issues wherever it's nominally held

 

I too would be reluctant to bring to Oz at current exchange rates, I came over in 2011 (with equally crap rates) and held out until late 2013 when I could get it out at about 1.8 but we're back in 1.5x territory again now. I have a colleague at present who's stuck between a rock and a hard place - doesn't want to throw money away at current rates to bring cash over to buy a house, but every day he delays in Sydney the housing is getting more expensive.

 

Feel for you

[robfromdublin]

Peer to peer lending maybe? I'm not clear on how risk-free it is but basically you'll only get a higher return for increased risk.

[ADAVIDH]

Thanks NSP. I've been here 17 years so fortunately I'm not in the unfortunate predicament your friend is in. When I first arrived the rate was 2.7 but I didn't have any money then! I wasn't necessarily thinking cash deposits but possibly mutual funds or fixed income securities. I wondered if anyone had had any experience dealing with UK financial institutions to set up accounts. CBA here can offer something but the process was so painful with 4 long 'phone calls (and I work at CBA!) that I wanted to look elsewhere before pursuing anything with them.

[Gbye grey sky]

Thanks for the reply Keith and Linda. Looks like the 'prizes' are 1.15% from May 2017 which is better than what I get at Natwest but not huge. I was looking for something with a guaranteed higher return but your reply is appreciated.

 

I am in the same situation. Most of mine is in shares (which have done very well recently) but I also bought Premium Bonds because I sense the stock market may be a little over valued right now. One issue with Premium Bonds though is that NS&I would only initially deal with me by post (and their response took weeks) so it took an age to set up. Then I transferred the money and was entered into the draw 2 months later so the whole thing has taken over 4 months and I won't even be in the draw until next month when I hear the prize fund has fallen.

[ADAVIDH]

Thanks RFD. I've no idea what peer to peer lending is. Do you have any further information on it?

[ADAVIDH]

I am in the same situation. Most of mine is in shares (which have done very well recently) but I also bought Premium Bonds because I sense the stock market may be a little over valued right now. One issue with Premium Bonds though is that NS&I would only initially deal with me by post (and their response took weeks) so it took an age to set up. Then I transferred the money and was entered into the draw 2 months later so the whole thing has taken over 4 months and I won't even be in the draw until next month when I hear the prize fund has fallen.

 

Thanks GGS (possibly hello, blue?) Did you set up the GBP account while you were in Australia? If so, just wondering which institution you used?

[Keith and Linda]

Even though we have been with our UK bank like forever and we have previously being able to put money into term deposits until last year when we tried and just hit a brick wall from every angle on many differing account types as we were not resident in UK, not always evident at first but it does appear in the detail (small print).

Just checked our premium bond returns and yep around the 1% but we live in hope for the bigger return on that one. However the house is returning a minimum of 4% on rent, capital gains not counted.

[ADAVIDH]

Even though we have been with our UK bank like forever and we have previously being able to put money into term deposits until last year when we tried and just hit a brick wall from every angle on many differing account types as we were not resident in UK, not always evident at first but it does appear in the detail (small print).

Just checked our premium bond returns and yep around the 1% but we live in hope for the bigger return on that one. However the house is returning a minimum of 4% on rent, capital gains not counted.

 

We've got an apartment over there achieving similar returns. That was until the roof caved in sometime in the past 2 weeks so no return in that until that's fixed!

[Gbye grey sky]

Thanks GGS (possibly hello, blue?) Did you set up the GBP account while you were in Australia? If so, just wondering which institution you used?

 

If you mean my GBP bank account then this we had in the UK and have retained and managed via the internet. Do you not have a UK current account?

[ADAVIDH]

If you mean my GBP bank account then this we had in the UK and have retained and managed via the internet. Do you not have a UK current account?

 

Yes, we have several UK accounts. I meant in order to trade shares. I'm assuming you used a UK-based broker/financial institution but I'm just checking.

[rammygirl]

Some of the peer to peer lenders don't accept applications from overseas either. I have managed to open accounts from Australia with Ratesetter, Assetz Capital and Thin cats. I would say the least risky ones are the first two especially the lower interest accounts. Your capital is not guaranteed though, but neither is it in shares. And there are no fees to pay. I have over the guarantee limit in the UK bank anyway so thought it worth a punt as couldn't open another better interest account even with the bank I have been with for many years!

 

You can also look at offshore accounts with UK banks and BS. Stirling deposits usually for a set time but better interest rates. Google expat savings.

[ADAVIDH]

Some of the peer to peer lenders don't accept applications from overseas either. I have managed to open accounts from Australia with Ratesetter, Assetz Capital and Thin cats. I would say the least risky ones are the first two especially the lower interest accounts. Your capital is not guaranteed though, but neither is it in shares. And there are no fees to pay. I have over the guarantee limit in the UK bank anyway so thought it worth a punt as couldn't open another better interest account even with the bank I have been with for many years!

 

You can also look at offshore accounts with UK banks and BS. Stirling deposits usually for a set time but better interest rates. Google expat savings.

 

Will check now. Thanks!

[Gbye grey sky]

Yes, we have several UK accounts. I meant in order to trade shares. I'm assuming you used a UK-based broker/financial institution but I'm just checking.

 

Oh, I use a platform, Fidelity, which I have used for many years. Charges are very low unlike brokers. I used to manage it online but now I am overseas it is slightly more restrictive though I can phone. In reality I make few changes; I probably should be managing a little more actively as some of my funds are not performing quite so well.

 

I really don't know if you can set up with them or similar platforms from overseas or what hoops (money laundering regulations) you would have to jump through.

[newjez]

I have a fairly large sum of money sitting in the UK. I managed to get some of it over before Brexit but there's some sitting in an ironically-named high interest savings accounts at Natwest. Last time I checked the interest was about 0.5%. As I am no longer a UK resident, my options are limited. I don't want to transfer it to AUD as the exchange rate is so bad. I considered setting up a GBP account here in Australia to purchase some securities but I am wondering if there are other options out that I have not thought of yet. Does anyone have any ideas how to invest the cash so I can achieve a better return on investment than 0.5%?

 

You could look at energy companies, fairly recession proof and many pay a good dividend. Stock market is a risky place, and these are troubled times. But it will take quite a while for the exchange rate to improve so it sounds like you are looking medium term. Many mining stocks are quite low, but recovering. Oil and gas likewise. Most of my money is in the USA ATM, being inflated by the Trump train. I'm not qualified to give advice, but I would advise getting some. You could do worse than a financial advisor, but at the very least do your research and sum up the risk. These are interesting times.

[MTut]

Premium bonds are the worst investment you can buy and with falling 'interest' you can expect them to get worse.

If you just want to keep it in cash then you can get 1 year bonds at over 1%. If it's more than £85k then Octopus have a cash management services that splits it across institutions.

If you can get past the financial red tape of being abroad then funds that aim to preserve capital are the next step up - Ruffer Total Return for example.

If you're going to put it away for many years then you can increase your equity exposure but as an advisor, I don't recommend buying individual securities unless you have good knowledge of the firms in question. It's much more prudent to spread the risk via a fund of many shares.

Offshore bond might be an option depending on the amounts involved and your timeframes.

[Keith and Linda]

Premium bonds are the worst investment you can buy and with falling 'interest' you can expect them to get worse.

If you just want to keep it in cash then you can get 1 year bonds at over 1%. If it's more than £85k then Octopus have a cash management services that splits it across institutions.

If you can get past the financial red tape of being abroad then funds that aim to preserve capital are the next step up - Ruffer Total Return for example.

If you're going to put it away for many years then you can increase your equity exposure but as an advisor, I don't recommend buying individual securities unless you have good knowledge of the firms in question. It's much more prudent to spread the risk via a fund of many shares.

Offshore bond might be an option depending on the amounts involved and your timeframes.

 

Most know there are options giving better interest (like bonds and fixed term deposits), the problem is getting them whilst being a non resident, so if you know an actual way around the red tape then please let us all know.

[MTut]

Most know there are options giving better interest (like bonds and fixed term deposits), the problem is getting them whilst being a non resident, so if you know an actual way around the red tape then please let us all know.

 

OP states that he maintains several U.K. Banks accounts so first port of call would be to see if those offered a parallel trading account which could be opened and run online. Barclays do, I know so I assume there's others.

 

You wouldn't be able to get access to the isa wrapper obviously but an unwrapped general account.

[MTut]

I rang a couple of brokers from the main offshore arms of UK providers, so your Prudential International, Old Mutual Isle of Man types to see if they'd be a bit more flexible about it but it seems Aus is on their restricted list. Pity, as that could have been a decent solution tax wise.

 

Any relatives still in the UK OP? That you trust obviously. :smile:

Pru Prohibited Countries List.pdf

Pru Prohibited Countries List.pdf

Pru Prohibited Countries List.pdf

[ADAVIDH]

I rang a couple of brokers from the main offshore arms of UK providers, so your Prudential International, Old Mutual Isle of Man types to see if they'd be a bit more flexible about it but it seems Aus is on their restricted list. Pity, as that could have been a decent solution tax wise.

 

Any relatives still in the UK OP? That you trust obviously. :smile:

 

Thanks MTut. I don't want to rely on UK relatives. The offshore bank accounts don't seem to offer anything better than the onshore ones. I agree about investing in shares directly hence I mentioned mutual funds/unit trusts or fixed income i.e. low risk investments that beat the interest rates. Natwest don't appear to offer any investment service unless you are UK resident.

 

I've made an assumption that the GBP/AUD FX rate will improve at some point in the next 2/3 years. While interest rates are better here than the UK, my calculations show that it's better financially for me to wait for a better exchange rate than bring the cash over now.

 

Still thinking!

[Danmon]

We were in the same predicament as your colleague. We've ended up bringing over the minimum deposit required and got a mortgage that lets us pay interest only for 5 years. After the 5 years it reverts back to repayment mortgage but by then house prices and the exchange rate hopefully have gone up and we can either bring the rest of our money over or sell the house and do a bit better on each one.

It's difficult to open accounts in the UK if you're not resident but not impossible. Maybe you can do better than 0.5% by shopping around

 

I fear your options are limited unless you want to use it to invest in other things with a higher risk (like shares) to try and get a better return. As a cash deposit you're pretty stuck. Any GBP account will have the same interest rate issues wherever it's nominally held

 

I too would be reluctant to bring to Oz at current exchange rates, I came over in 2011 (with equally crap rates) and held out until late 2013 when I could get it out at about 1.8 but we're back in 1.5x territory again now. I have a colleague at present who's stuck between a rock and a hard place - doesn't want to throw money away at current rates to bring cash over to buy a house, but every day he delays in Sydney the housing is getting more expensive.

 

Feel for you

[ADAVIDH]

So I have discovered a way to purchase GBP-denominated bonds. An Australian company called FIIG securities can do this on your behalf. There are monthly fees and you need to prove you hold assets greater than $2.5 million.

[rammygirl]

What sort of interest rates/fees. Is it worth it? NS&I also does bonds and I think you can open an account from overseas. No idea on dates though.