This page contains all the information overseas students need regarding money and banking in the UK.
· About UK currency
Despite the UK being part of the EU (European Union), the UK has chosen to retain its own currency, the Pound (officially called “Sterling”), rather than using the Euro like most countries in the rest of Europe.
For current exchange rates of Sterling against the Chinese Renminbi and other major world currencies click on the link below.
The XE.com Universal Currency Converter
Sterling uses a combination of Pounds (￡) and Pence (p), where ￡1 is equal to 100p; hence prices are often quoted using 2 decimal places, i.e. ￡4.50, ￡1.99 or ￡25.00.
Sterling cash consists of the following denominations;
Paper money / notes: ￡50, ￡20, ￡10, ￡5
Coins: ￡2, ￡1, 50p, 20p, 10p, 5p, 2p, 1p
Reports of counterfeit currency are fairly uncommon in the UK. British bank notes are extremely hard to forge as they use many specialist printing techniques, including watermarks, metal strips and even holograms. However, this does not mean care should not be taken whenever receiving change.
· How much do things cost in the UK?
For a rough guide on how much things cost in the UK see;
· Do I need to open a UK bank account?
If a student intends to stay in the UK for less than 6 months, they may find it easier keep their money in their Chinese bank account.
Students can choose to bring cash and/or travellers cheques, which they can change into Sterling at foreign exchange outlets called “bureau de change”, often found in airports, main train stations and city centers or most high street banks also have foreign exchange counters.
Alternatively or in addition to cash, students can use certain Chinese bank cards and credit cards (i.e. Visa, Mastercard, etc.) to obtain local currency from UK cash machines, called ATMs (Automated Transaction Machine) in the UK.
Bank transfers from abroad direct to UK bank accounts are perhaps the most convenient option for paying large amounts, such as tuition fees and/or accommodation fees, directly to the school / landlord.
If a student is over 16 and staying in the UK for more than 6 months, it is recommended they open an account with a UK bank.
Some of the benefits include, but are not limited to the following:
· What types of bank account are available?
1. Current account (checking account)
This is a basic bank account that can usually be opened by anyone over 16 (although some banks have a minimum age of 18) and who can prove that they have a permanent address in the UK. Current accounts can usually be opened with a zero opening balance and allow account holders to make unlimited deposits and withdrawals including receiving direct bank transfers from the UK or abroad, setting up standing orders and direct debits and using ATMs to deposit and/or withdraw cash using a cash card. Basic current accounts usually offer telephone and internet banking facilities for free or for a small annual fee and might also offer overdraft facilities, cheque books or debit cards.
These days most UK banks offer special current accounts that offer extra services for a monthly fee and many will encourage new customers to open such an account. Blue Sky Study generally recommends that such accounts are not necessary for the average international student.
2. Student account
If a student intends to study at a recognised UK higher education institution for over a year, they should be able to open a student account. Because the standard UK academic year begins in September / October, banks may only allow student accounts to be opened between August and November.
Student accounts offer all the same services as current accounts as well as cheque books and debit cards, making it even easier to access money and pay for goods or services by post, telephone or on-line. Most banks also offer an overdraft facility with student accounts and many also offer credit cards for students that can prove they have a good credit record and prove their source(s) of income, i.e. personal savings, family assistance, scholarship, part-time employment, etc. Certain banks only require students to have a minimum balance in their student account when applying for a credit card, to be approved.
All the main UK banks offer student accounts and many bank branches located close to university campuses have special student advisors. To attract student customers they all offer various free gifts including cash back, discounted student rail cards, music CD’s, etc.
Some banks charge a small monthly fee for their student accounts whilst others are free. Banks usually charge interest and a monthly fee for using an overdraft and going overdrawn beyond the agreed overdraft limit will incur very high penalties in most circumstances.
3. Savings account (deposit account)
The majority of UK current / student accounts pay very low interest rates, typically below 0.5%. Therefore, if students intend to deposit large amounts of money into their UK bank account, they may consider opening a savings account, in addition to a current / student account with their chosen bank. Savings accounts can require a higher minimum initial deposit and may also have restrictions on the minimum balance and withdrawal amounts but will pay significantly higher levels of interest on the account balance. Interest rates vary from bank to bank and over time.
· How do I open a bank account and what documents do I need?
It is not possible for students to open UK bank accounts in China, before traveling to the UK, therefore students must wait until they arrive in the UK.
Most UK banks will require students to go to their local branch in person and bring the following documents with them at the time they wish to open an account.
For current and savings accounts:
1. Proof of identification, i.e. passport.
2. Proof of UK address, i.e. student accommodation contract, tenancy agreement or a letter from the school, college or university advising the bank of the students’ UK address.
In addition, for student accounts:
3. Proof of study, i.e. letter of admission or enrollment from a recognised UK higher education institution. Some banks require this letter to show the students’ home address in China, written in English or pinyin (ABC…). If the letter does not have this, students should also ensure they have proof of their overseas home address, showing their name and address in English or pinyin, i.e. national ID card or bank statements (no more than 3 months old).
4. For students that would like to have an overdraft facility and/or credit card, it is recommended they also bring a reference letter from their Chinese bank, in English, stating they are a good customer as well as proof of their source of income, i.e. recent personal bank statements or family’s bank statements (depending on who is financing the students’ studies) and details of sponsors, scholarships and employment where applicable. Depending on which bank is chosen, these documents are not always necessary, but if provided will help any application and might even help to secure a higher credit limit.
The UK has standard high street banks and also banks that operate exclusively via telephone and on-line. Telephone / internet banks offer higher interest rates paid on current account balances due to their lower overheads. However, all the major high street banks also offer telephone and internet banking services, usually for a minimal fee or free of charge. Blue Sky Study highly recommends students choose a high street bank so they can enjoy the maximum level of convenience in accessing their money and managing their finances.
List of recommended high street banks and building societies*:
* Building societies offer similar services to banks except that they are not publicly listed companies, i.e. they are effectively owned by their customers (savers and borrowers) instead of by shareholders.
The main factor in deciding which bank to choose is branch location. All of the above banks have many branches as well as stand alone ATMs throughout the UK. However, the bank with a branch closest to a student’s place of study and/or accommodation will ultimately be the most convenient for them to use.
The services available and the charges for each service differ from bank to bank so this might also influence the decision. For instance, one bank may offer an overdraft limit of ￡500 while another may offer ￡1,500. One bank may offer some attractive free gifts but also charge a monthly fee unless there is a certain balance in the account while another bank will have no free gifts but no monthly fee.
After visiting the bank and opening an account students should expect to receive a letter of confirmation from the bank sent by post to their UK address, followed by their cheque book, cash card, debit card, credit card, etc. When students receive the cards they will normally need to telephone a given number and answer some security questions to activate the card. For safety reasons, all the Personal Identification Numbers (PINs) for the various cards are always sent separately to the actual cards and usually arrive shortly after the cards. Students should memorise their PINs and never tell anyone else what they are.
It will take a little time before the bank account is active. Hence it is recommended students take enough Sterling and/or travellers cheques with them to cover the first couple of weeks in the UK. The first installment of any tuition fees and accommodation costs should ideally be paid before arriving in the UK (i.e. by electronic transfer). Alternatively students can arrange for a bank draft from their home bank payable to the institution in the UK for the correct amount, in Sterling. Using these methods means students avoid having to carry too much cash with them when traveling to the UK, as most institutions insist that these fees are paid prior to or at the time of enrollment, when most overseas students will not yet have an active bank account to make payment from, unless they arrange to arrive in the UK well before enrollment.
Once the bank account is active, students can then more easily have money sent to them from abroad, direct to their UK bank account by electronic transfer, which they can then use to pay their remaining tuition fees, accommodation and other living expenses.
Q: Do I need to take any Sterling with me when I travel to the UK?
A: It is highly recommended that all students bring some Sterling with them when they travel to the UK. How much students will need depends on individual circumstances, Blue Sky Study are able to advise. In general we recommend taking at least ￡200 as a minimum, to cover travel from the airport and any possible emergencies such as lost luggage or needing hotel accommodation for one night.
Q: What are the opening times for UK banks?
A: Standard opening hours are 9:00am – 4:30pm Monday to Friday although these times may vary from bank to bank and even between branches of a particular bank with some branches offering early opening and/or late closing on certain days of the week. UK banks do not close for lunch, indeed lunchtime is often the busiest time of day for many high street bank branches so is generally best avoided. Most banks are closed on weekends and public holidays although certain branches will open on Saturday mornings.
Q: What are the limits on withdrawing cash?
A: A daily cash withdrawal limit applies when using ATMs. This limit varies from bank to bank. It is commonly about ￡300. There is no limit for withdrawing cash over the counter in the bank, except for certain saving accounts. Note that when withdrawing large sums of money at a bank, i.e. over ￡500, most banks will ask for extra identification, i.e. passport, to be provided.
Q: Can I deposit cash and/or cheques using an ATM?
A: Most ATMs found at actual bank branches will accept deposits. Many banks also have simple “deposit bins” inside the branch. This can save customers having to wait in line. Fill out a paying in slip and put it with the cash or cheque into an envelope before placing it in the ATM or deposit bin. The slips and envelopes can be found inside the bank. Note that some banks request cash and cheques are deposited separately in separate envelopes.
Q: Can I use my card in another bank’s ATM?
A: Yes, other bank’s ATMs can be used to withdraw money so long as they accept the type of card being used. For example, if a card has a Visa or Mastercard symbol on it then look for a machine that displays the same sign. Note that a small charge is usually levied for each transaction, when using another bank’s ATM.
Q: Can I withdraw cash using a credit card?
A: Yes, it is possible to withdraw cash from ATMs and over the counter at banks using a credit card. However, credit cards apply very high rates of interest for cash withdrawals as well as charging a fee when making each transaction, so it is not recommended to use credit cards for anything other than making direct purchases.
Q: How long does a cheque take to clear?
A: After depositing a cheque into an account, customers should always wait at least 6 working days before being completely sure that the cheque has cleared. The sum of money the cheque was written for will become available to be withdrawn after only 4 working days. This does not necessarily mean that the cheque will not bounce, so always wait the minimum 6 days before being 100% sure that a cheque has cleared. Customers should keep a note of whenever they write cheques out and how much they were for incase they forget about them and then later find that money is withdrawn from their account possibly leaving them with less money than they need or even sending them beyond their overdraft limit.
Q: Can I use a cheque to pay for goods / services in a shop?
A: Only if the bank has provided a cheque guarantee card. Most cheque guarantee cards will only guarantee a cheque up to the value of ￡50 or ￡100. However, these are becoming increasingly uncommon due to the widespread use of debit and credit cards as a far easier and more secure method of payment. In addition, many high street stores in the UK no longer accept cheques at all anymore.
More in this section:
For the latest news about living in the UK:
To search for a course of study in the UK:
To search for a school, college or university in the UK:
For information about UK education:
