Each year, around 20,000 UK students travel abroad to study for at least three months, attracted by the idea of experiencing a different way of life. Yet, while the students. While the students are no doubt excited by their new adventures, for parents, the practicalities might lead them to worry, not least about how they can get money to their son or daughter if needed.
Thankfully, this is much easier than it might first appear, with plenty of options available for transferring funds quickly and easily.
Financial considerations when studying abroad
Before you even begin thinking of transferring money abroad, there are a few things you’ll need to consider:
1. How much studying abroad is going to cost and which of these you might be covering? Are you paying for student fees, for example, day-to-day living expenses, or planning on sending money for emergencies only?
2. How often are you planning on sending money? Depending on whether you plan on making a one-off payment or regular, fixed, payment could impact the way you choose to transfer your money.
3. Is the country your son or daughter is studying a cash economy or are credit cards and other forms of electronic payments such as e-wallets readily accepted?
4. Will your son or daughter be opening a bank account when they arrive or relying on their UK account while they are away?
It might not be that easy to set up a bank account as an overseas student. There are a limited number of such accounts available in the USA, for example, while Australia and New Zealand both have plenty of choices for international students.
Another option would be to see if your son or daughter’s bank has an overseas division as they might be able to open a bank account through them.
What are my options for transferring money abroad?
There are three main options when it comes to sending money abroad. The first is through your bank or building society. This is probably the safest way to transfer funds, though not the quickest (transfers can take up to six days) and your son or daughter will need a bank account in the country they’re living in. Plus, you can set up recurring payments quickly and easily.
Check the exchange rate you’ll get if you arrange a bank transfer; these are often lower than other available options. Also, ask your bank if you are exempt from transfer fees as a student as many will waive charges.
The second way to send money abroad is to use a foreign exchange or FX broker. This is much quicker than using a bank and money can often be transferred the same day. As with banks, you can set up recurring payments.
However, it can be expensive unless you are transferring large amounts of money; anything over £3,000 is normally transferred without charge, while lower amounts will have a fee attached.
You’ll also need to set up an account with the broker, which can take a couple of days, slowing down any money transfer you want to make.
The final option is to use a money transfer company such as MoneyGram, who operate through the Post Office. Money transfer companies can be found on the high street, though the majority can also be found online. Like FX brokers, cash is available almost instantly, though you can’t set up recurring payments. However, your son or daughter will need to be able to visit their offices in order to collect the money or, again, have a bank account and arrange for the money to be transferred into that.
The rates money transfer companies charge can vary considerably and can be quite high, especially when you’re transferring smaller amounts of money, so it’s worth shopping around.
Alternatives to transferring money abroad
If you want to send money to your son or daughter but don’t want to transfer it to them using the options outlined above, there are alternatives, including:
1. Transferring money to their UK bank account using BACS then have them use their own ATM card to withdraw cash as and when they need it. The main benefits of BACS transfers are it won’t cost you anything, and your transfer will be protected under UK legislation.
While there are no fees for transferring between UK bank accounts, there still may be a charge for withdrawing money from a foreign ATM. Banks might also charge a conversion fee.
2. Sending money using online money transfer sites such as Paypal, allowing them to make online purchases direct from their online account, or transfer the money into a bank account. One of the nice things about these sites is you can see just how much of a foreign currency your son or daughter will receive so they aren’t left short and you aren’t hit with fees you didn’t need to pay.
While Paypal is probably the most well known of the online money transfer sites, there are other options available. As most charge a fee and these fees can vary, it’s worth seeing which one will work best for your family.
3. Linking your credit card or bank account to a mobile wallet (also known as an e-wallet) such as ApplePay or GooglePay, allowing them to make purchases wherever they’re accepted. This is a good option if you want to cover certain expenses, such as food or transport, but won’t work if your son or daughter need cash in hand.
Another downside of mobile wallets is that not all shops accept them and, if they are travelling outside of countries in mainland Europe, the US or Australia, there is a chance that they could be left without a way to pay for things.