London is a city which polarizes opinion, a city which inspires either love or loathing, but whatever your personal feelings about London may be, the one thing that binds everyone together, the one thing that everybody agrees on is that it is fucking expensive.
It costs a fortune to live in London and after paying for rent, food and travel expenses there isn’t much left over so it is important to try and maximise the meagre amounts of money you manage to save, but saying that there isn’t much point in trying to get money together if you don’t have a bank account.
As everyone who arrives in London knows getting a bank account isn’t the easiest thing in the world. The difficulty in obtaining an account is that you need to show proof of address and considering that a lot of people arrive in London broke after a few months of travelling, without enough money for bond this makes things difficult.
If you do happen to have your name on a lease or a utility bill then it is simple enough to get an account. You need to bring the original copy of the above documents as well as your passport into any branch of Barclays, Lloyds, HSBC or Halifax and you receive your account details the same day.
HSBC is a cut above the rest as it has the added option of allowing you to apply for a credit card whereas the other banks have a 3-6 month waiting period before you are eligible. The thought of credit card interest rates calculated in pounds is enough to send a shiver of fear down your spine but it pays to remember that if you are still using an overseas credit card you are being charged conversion charges everytime you use your card.
If you don’t have proof of your name on a lease or utility bill then your options are limited to Lloyds Worldwide Service or First Contact.
Lloyds Worldwide Service accepts alternate forms of ID such as a copy of your bank statement from home with your London address printed on it, or a letter from your employer confirming your address. It takes 10minutes to fill out an application form and you get your account details in 2-3 weeks. Your account includes a chequebook, Chip and Pin card and savings account.
If you need to open your account as soon as possible and don’t mind parting with ?30 then First Contact can set you up with an account within 3 days. You need to provide your passport as well as a letter from someone you are staying with (who has their name on a lease/utility bill) confirming you are living at that address, as well as the original copy of their lease/utility bill. You are given the option of either a HSBC or Natwest account. The Natwest account has a ?9 per month fee which can be reduced in 3-6 months whilst the HSBC account has no fees but has a ?10 medical plan attached where you can claim up to ?40 on medical expenses such as optical and dental.
Upon arriving in London the most important thing is to get an account quickly, and it isn’t until you are safe in the knowledge that you have somewhere to store your money that you start to compare accounts. Most accounts have charges attached with interest rates starting from as little as 1.04% and not going much higher.
Barclays offers interest rates of up to 5.35% – but only if you put your money in a 2 year fixed term deposit which means you won’t be able to access your money in order to take an impromptu trip to Paris.
ING Direct offers a flexible high interest account, 5%, which allows you to increase your savings and still have access to your money when you nee it.
If you have a Limited Company (LTD) you can also take advantage of the tax breaks given to corporations to help you save money. Instead of putting your money into a savings account you are eligible to invest money through your company and take advantage of high interest, risk free investment options (some of which are not subject to tax).