How to Open a Bank Account in the UK
It used to be difficult to set up a bank account in the UK, but these days it is far easier because of their massive influx of immigrants mostly from the middle east and partly from Europe. The banks were simply pushed into a corner due to the overwhelming number of immigrants in the UK, so they loosened their account requirements significantly. You are going to have to visit the UK in order to open your account. There are some banks that will allow you to do most of the paperwork before you arrive, but you will need to physically visit a branch before they will actually activate your account.
Do You Need To Be A Citizen?
At the moment, while the UK is still part of Europe, it is very easy for European people to open a bank account in the UK even if they are not citizens. If you are not a citizen, but you are working or studying legally in the UK, then it is possible to get a UK bank account. If you are a frequent visitor to the UK, then you may be able to get a UK bank account, but there is lots of red tape and checking. On the other hand, if you have never set foot in the UK, then it will be difficult because you will need darn good reason for wanting a UK bank account.
After all, the UK is not a tax haven, and it is not a good place to hide money, so the demand for bank accounts from foreigners is rather low. In addition, banks want to steer clear of anything that appears drug or terrorism related, so they need you to give a good reason for wanting a bank account and they want proof to back up your claims before they will even consider your account application.
How Are Middle Eastern People Doing It So Easily?
In many cases, they are able to say that they have family in the UK and that having a UK bank account will make transferring and storing money easier when dealing with family. The UK used to have a number of fake universities where people from the Middle East where able to buy entry and use it to get a UK visa, but the conservative ex-prime minister David Cameron was able to shut 19 (maybe more) of them down. One of the most common tricks is to get a work visa claiming that they had a position waiting for them with friends in takeaways and taxi firms. If you can get a work visa, then it is relatively easy to get a UK bank account.
Another Trick That Some People Use
You are going to be asked for quite a bit of documentation when you open your account, and it helps quite a bit if you have a UK address. Before you leave for the UK, contact your bank and ask them to change your correspondence address to one in the UK. Have your newest statement sent to the UK address, and pick it up when you get to the UK. You may now show a current bank statement with a UK address on it. You will probably be more successful if you are actually going to live at the address when you get to the UK, but there are plenty of clerks that see a statement, see the address, and give it no further thought.
What Happens If You Apply To One And Get Refused?
Since you are not a UK citizen, it takes a little longer for any form of credit rating damage to occur. You may be able to avoid credit rating damage all together if the bank account you applied for has no form of lending facility. Nevertheless, as a foreigner in the UK, your credit history may not show that you were rejected by a bank. In addition, it may take days and weeks to show up on your banking or credit history, which means you may apply for a handful of banks in a short period of time and none of the banks will know you were rejected by other banks. On that note, if you lie on the application forms for a bank account in the UK, the bank will be able to cancel your bank account whenever they find out about your lie…but that is only if they find out.
What Documents Will You Need?
Each bank is going to give you a list of the documents it requires when you apply for your bank account in the UK. In many cases, they send you an email telling you what you need after you have booked your appointment to open a bank account in the UK within a bank branch.
Depending upon your status, your country of origin, your reasons for visiting the UK, and your reasons for wanting a bank account in the UK, you may be asked for different documents. However, all banks are going to want proof of your identity and proof of your address, and the documents they request will reflect that fact. Even if you are applying online, they will still want proof of your ID and address via scans and e-documents.
[o] A passport is always a good thing to take
[o] A driver’s license from the UK or your country is also useful
[o] A driving permit or a temporary license may be helpful
[o] Identity cards for foreign nationals
[o] A current tenancy agreement may be acceptable
[o] Tenancy agreements or leases for more than three months are good too
[o] Mortgage statements for UK properties are often accepted
[o] A water bill, phone bill, TV bill or Internet bill from within the last three months
[o] Electricity or gas bills that are less than three months old
[o] A bank or credit card statement that is less than three months old
[o] A current council tax bill with your address and name on is acceptable
The list above features documents that are likely to be accepted as proof of your identity and proof of your address. The ID must be a photo ID, maybe with exception of certain identity cards for foreign nationals, yet if you do bring an identity card for a foreign national, then bring a backup such as your passport too.
Documentation Rules Are Bendable In The UK
As I mentioned, the doors to the UK are wide open if you know the tricks, and there is little the UK government can do about it at this stage, which is why more and more people are emigrating there while the UK struggles to get out of Europe. The doors are wide open, so banks are a little flexible when it comes to some of the things listed in the section above.
For example, if you are studying in the UK, you may be able to take a letter from your University’s admissions office to confirm where you live. If you have a letter from the JobCentre Plus that confirms your National Insurance number, then that letter may be used as proof of your address if it is from the last three months.
Will I Be Able To Open Bank Account In The UK Before I Arrive?
In many cases, you are able to do most of the paperwork and application process prior to arriving, but in order to activate your account, you may have to visit in person. There are other ways to open a bank account in the UK before you arrive. The most common method is to sign up with a bank that also has branches in the UK. For example, if you have an account with HSBC in your country, you could speak to a person in your local HSBC branch and talk about opening an account in the UK too.
Even if the bank will not allow you to open a bank account in the UK without actually arriving there and doing it in person, they may still be able to offer you an international account. This type of account works the same way it does in your own country where your card and your account works the same way in the UK. An international bank account may be handy if you are having trouble proving that you live in the UK or that you have a UK address.
UK banks also offer international accounts, which means you may open them online and use your own local address, yet your international account works just like a regular bank account in the UK. Lloyds, Barclays, Natwest and HSBC offer international accounts where you may apply online without having to prove you have an address in the UK.
International Bank Accounts Are Sometimes Expensive
Get an international account that works in the UK, or get an international bank account from a UK bank, and you may avoid the process of getting a UK-only bank account. International accounts allow you to give your local address in your own country, and when you get to the UK, you may use your international bank account the same way you would use a UK bank account.
The downside is that international bank accounts almost always come with extra fees. It is not the sort of bank account you may open and use or maintain for free. You may have to pay maintenance fees at the end of every month, and you may be charged a fee for each different type of currency you put in your account. Each bank that offers international bank accounts is going to have its own set of rules and restrictions, such as how some of them force you to commit for a certain number of months where you are still charged fees even if you try to close your account before the period is up. There may also be fees for transactions with your account, you may have to commit to paying a minimum fee per month even if you do not make transactions, and you may be asked to enter a large deposit before you arrive. It may be worth trying to get a bank account in the UK first before you consider international bank accounts.
Time For Some Mixed Signals
Most of this article has been spent telling you how easy it is to get a UK bank account, but that is not strictly true. It is certainly much easier to get a UK bank account than it has ever been before, but there is another obstacle that needs addressing. The UK banking industry is very competitive, and as a result, UK banks will target a certain group of people and batter them with advertising.
UK banks do this to the exclusion of others. The staff are heavily incentivised to chase a certain target group, and if you are not part of that group, then you may be brushed aside.
It does work the other way too. If a bank is chasing new customer who live in the UK, or foreigners looking for UK bank accounts, then you will be hounded to the shores of the Great Isle.
Look For Bigger Banks That Have A Long History
One of the biggest problems that some people have when dealing with new bank accounts is that they do not have a credit history, and they may not have been in the country very long. If that is the case, then you need to consider a larger bank that operates in the UK.
For example, Natwest/RBS, Lloyds, Barclays and HSBC have a long history in the UK and they have had quite a bit of experience dealing with people who want new accounts, people who are new to the country, and people who do not have a long banking or credit history. It is not that these banks are more flexible than others, it is just that these banks have a process in place for dealing with people under these circumstances. The staff at the banks and the website administrators have steps they can follow, which may involve things such as:
[o] Proving your ID more thoroughly
[o] Setting you up with limited accounts
[o] Getting references from your workplace
[o] Getting references from people who have an account with the bank
[o] References from people who work for or with the bank
[o] They may even allow other people to nominate you for an account
[o] Or, maybe have other people be your guarantor
Again, it is not that bigger banks are more flexible, it is that they have a process and plan for dealing with people in a way that usually (eventually) leads to the person in question getting a bank account.
Knowing People Does Help
In my younger years, when I left college, I considered unplanned overdrafts to be something that were there for the taking. I used to overdraw all the time because it meant quick cash when I needed it the most. As a result, I had my account taken off of me.
About a month later, my Aunt wanted to pay me money for money birthday, but she discovered I didn’t have a bank account. Her jewelry shop banked with HSBC, so she marched into her local branch and demanded that they give me an account…which they did.
Maybe you have an influential family member? Maybe one of your family members has a business and may be willing to talk to his or her bank? You may know somebody who works at a bank that may be able to bend the rules a little for you. Do you know somebody who will help you open the account by agreeing to be your guarantor?
TransferWise Have A Borderless Account
If you live in the US, UK or the Eurozone, then you may use the Transferwise Borderless account. It is an online bank that acts like a bank in your own country. It is just like having a bank account in the UK except that you cannot visit branches. Your account is automatically able to hold 15 currencies side-by-side, and Transfewise is originally a transfer and exchange company, so they can get you a good rate on your currency exchanges too.
The account is just like a bank account with bank account security. The only difference is that it is not insured by the government. For example, if you get a Natwest account, it is FSCS insured, which is similar to the FDIC insurance in the USA. With government insurance by the FSCS, your UK bank account is covered up to £85,000, which means if the bank goes bust, then you get up to £85,000 of your money back.
Transferwise Borderless accounts do not come with government insurance. I once had a chat with the banking administrator about this. She wasn’t one of the founders, but she was on the board of something or other. She gave me a bunch of talk and not much substance. After half an hour of listening to her scripted reply, I finally nailed it down to Transferwise bank accounts not needing FSCS insurance. Since they do not offer lending facilities, and since they do not make their money by lending, the customer’s money is not at risk. Banking customer’s money is not lent out for mortgages or business loans, it just stays in their account. As a result, even if the company takes a downward turn, the money in people’s accounts will still be in people’s accounts, therefore FSCS insurance is not needed.
In addition to all of this, your Borderless account has no maintenance fees, and there are no fees for setting up or receiving money. Adding money costs nothing, and only withdrawing to regular banks costs any money.
The TransferWise Borderless account seems like a fantastic deal to the point where it seems too good to be true, so what are TransferWise getting out of this? What they are doing is securing a bigger chunk of the exchange market. Instead of people using their regular banks or other exchange companies, people who use their Borderless account make their exchanges with TransferWise, and that is where Transferwise makes its money.
Conclusion – Painting A Picture
I haven’t painted a very good picture of the UK in this article, but it is their own fault. They have allowed hundreds of thousands of European and Middle Eastern people into their country in numbers that are unsustainable. Everybody deserves a fair chance for living where they want to live, but the UK seems to have forgotten that they do not have room to take everybody who knocks on the door (or sneaks around it).
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The massive influx of new arrivals over the last few years has made it much easier to open a bank account in the UK, but as I said in the article, it is far easier if you have a job and/or work permit in the UK, if you are a student in the UK, or if you can prove residence in the country.