A question, valid, what would you do?
 

Long story, spent a fortune getting visa's, validating (£20k), never bothered with this site until tonight. Sold the house the business the lot, ready to leave for good, one thing the exchange rate is not great.

I am not gloating, just a plain working class couple, nothing special, worked hard, i am just past forty, over weight, but happy.

If you had 400k sterling sitting in your current account, would you exchange now and go, i mean exchange at 2:1, or would you wait?


Any advice appreciated, do not know what to do, what would you do? In the current economic enviroment?

P.S. Kids left home, me not working, missus works in NHS, doctor, renting currently in the Midlands, interest pays rent.


Suggs.

Re: A question, valid, what would you do?
 

1.Change only £50k for now!
2. Go do some exercise so you are healthy enough to enjoy the other £350k
3.Just over 40?<sucks teeth> quick run and enjoy yaself:rofl:

Re: A question, valid, what would you do?
 

Wouldn't change all of it that's for sure. Put a pile in the highest interest account you can (not locked in for more than 6 months though), transfer enough to keep you going for say six months and maybe the rest in another account, less interest but easily accessible then you can transfer it as the rate gets in your favour or as you need it for property etc.

Re: A question, valid, what would you do?
 

As the others have said, I'd only change what I had to, put what I could afford to in a higher interest account and then wait for the exchange rate to go back to a better level (if it does :) )

I have a regular income from the UK which I transfer over when it gets to GBP10k but it'll just sit where it is for the time being.

Re: A question, valid, what would you do?
 

If it were me, I;d change a small amount now and leave the rest in a UK savings account until needed.

But the key thing that many people seem to forget is to look around and research money transfers and look at who gives the best exchange rate since they are all different every day. The larger the sum the better the chance of making far more.

I have always used xe.com since I found they offered the best rates even though I paid a £9 fee to move it, I made much more on the exchange rate - and these are small sums like 5,000 GBP.

Best do research before moving, sign up and register with a few so you are ready to go and on the day you decide, check them all then fix it!

Re: A question, valid, what would you do?
 

Bear in mind that you would be liable for Australian income tax on the interest wherever it is invested.

This may make a difference.

G

Re: A question, valid, what would you do?
 

If it were me I'd change 50k and come over, with a view to getting back into some form of work in the next 6months or so. I would buy shares with the 350k in the UK. Dividend income might not be too great for the next 2 or 3 years, but you would expect that things will improve soon. Far better than sticking your money in a bank account, in my opinion.

Last thing I would do at the moment, would be to change it all into AUD... unless I 100% needed to.

Re: A question, valid, what would you do?
 

Morning,

Thankyou all very much for your replies so far, it would seem that the solution for now would be to leave as much as possible in Sterling until the exchange rate reaches a rate which only each individual can assume to be the required rate. We are intending on flying out this summer, so i am going to stick it all in here;

http://www.nationwideinternational.com/

From what i have read, you can access it from Australia, and pay the interest tax on it to the Australian authorities while living in Australia. When the rate hits required rate, i will send it all to my Forex account.

Thank you again, i cannot see any other option.

Re: A question, valid, what would you do?
 

If you go shift 50 over make sure your other 350 isn't all with the same banking umbrella. Just incase as I am sure you are only covered to 100 per institution.

Re: A question, valid, what would you do?
 

What you do is spread your risk.

You put some into long term investments (equities are very cheap at the moment and a good long term growth bet).
Buy a bolt hole appartment that you rent out (in case you eve want to return to the uk). Again very cheap at the moment.
Put a chunk in an offshore sterling based savings account.
Take some with you.


......or you could just put it all on red and hope to double your money.




Oh yes and you cannot rely on anything I tell you

Re: A question, valid, what would you do?
 

Reality is that £400K is not a huge amount and you will spend that much if you want to buy a house depending on location.

rent in parts of Australia, for a family, may be a lot more than you will be getting in interest.

when you consider other factors such as the tax implications and no guarantee that exchange rates will change in your favour then the best plan may be to simply move the lot and use it to buy a house.

G

Re: A question, valid, what would you do?
 

I agree as if you are just over forty and want to live on the money then hopefully its got to last a long long time.

Re: A question, valid, what would you do?
 

I agree with this, but the problem is - the current exchange rate.

I know that it's impossible to predict the future, but lets say that the UK pound strengthens in time. Change GBP50k now ($100k) and then GBP350 at ..e.g 2.35 would give you another $820k, so $920k all up.

Something to think about anyway.

Re: A question, valid, what would you do?
 

Cheers for the replies,

Yep, in todays climate £400k is not a massive amount of money when you have it, but its a massive amount when you do not have a penny to your name, and also have debt. So not too bad off, but like i said, no gloating, just a normal chap looking outside the box?

I look at it like this;

So Today
Exchange rate is 2:1
House prices in Oz are very high in relation to earnings
So an $800k house is $800k for the money i exchange at 2:1


Say in two or three years;

Exchange rate hits 2.5:1
House prices in Oz relax say by 20%
So $1 million exchange cash and 800k house only costs me $640k

So, in reality i am $360k better off for waiting two years, admit, i have no crystal ball, but i am a gambler, so it just may pay off.

That $360k can be spent between today and two years time, having fun, so $360k divided by current exchange rate 2 = £180k divided by two years = £90k per year, so i have £90k per year for the next two years to live off and have a good time waiting for things to fall over in my favour and i will be no worse off than exchanging today and buying a house in Australia at todays costs? (three years £60k per year) All in all, i think i am quite conservative with my positive hopefull expectations in my favour?

Cheers;)

Its just a very bad time to make the move from the UK to Australia, so maybe best to either sit tight in the UK, or put it offshore, spend some of the capital enjoying yourself in Australia, taking it easy, because you may be no worse off in two or three years time, like above, just my two penneth, but at the end of the day you take your chances and are a long time dead!


Be Happy, the most important thing.

Re: A question, valid, what would you do?
 

Very interested in this thread as we are in exactly the same predicament. My husband is behind me shouting it is going down and down and down, think he is on Teletext checking the rate, well I hope thats what he is talking about!

Re: A question, valid, what would you do?
 

How much are you talking about, less than 100k sterling, is not too bad, but have to admit things look like they are going to get worse untill they start getting better for the £ to $ exchangers, could be in for a two year wait?

Re: A question, valid, what would you do?
 

I agree that 400k is not a huge amount if you want to retire at 40 but it is a bloody impressive amount of money to have in your early forties even if you have sold a house, especially if no one has left you any. I reckon most of us only have around 100k at that age if we sold our house and many of us a lot less.
I read somewhere that in the U.K at around 40 you need about 2 million to retire and even than have to be reasonably sensible.

Coming from the U.K to Australia with that sort of money should easily see you in a similar size house & lifestyle even if you do need to work part time.

Re: A question, valid, what would you do?
 

Depends a bit on what rate you were expecting when you started on the process. Less than 12 months ago the rate was around 2.05.
When we did our reccie we looked at everything as 2 to 1 and it compared very similar to the UK. Above that I guess is a bonus, concern is how far it slips below.

PS surprised with all your royalties from Madness you are worried about trivialities like exchange rates!! :wink_smile:

Re: A question, valid, what would you do?
 

Currency market will have a very bumpy ride over the next 12-18 months. It will throw up quite a few good opportunities for you to change your money. For now, change only the bare minimum you need for regular expenses. Don't panic if the rates move against you in the short term. Its bound to come down.

Re: A question, valid, what would you do?
 

Your husband sounds like me - I despair of the exchange rate on a daily basis!

I have less than £10k in savings (I've just left uni, going on a WHV) and there's no way I'm transferring it all in one go. When my boyfriend was over here last year it was £1 = $2.50; last time I worked out the difference between the rate now and the rate then, I'd "lost" over $2000. I've said loads that I dread to think how much people with a few hundred grand would lose!

I agree with the others; take enough to tide you over for six months and fingers crossed the rate will have improved by then!

Re: A question, valid, what would you do?
 

OK, just for clarity, this is not advice, but something I have gone over and thought about, so I have decided to do this, for reasons below.

I was going to open one of these for the same reason as you, wait for the exchange rate to improve, while living in Australia, receiving tax free monthly interest, and paying any taxes owed on the interest to the ATO, as I would be a permanent resident, When the exchange rate favours me, I do not need to return home, I can send the money to my Forex account from Australia, easy peasy lemon squeasy? Two things, this account has very little protection with regards to getting you money back should it go under. Also there seems to be an air of shadiness about it, the account application form asks some very personal questions, see below.

Questions on application form Quote;

1. Reason for opening and the ongoing purpose of your account

4. Source of wealth please provide specific information about how and when your money has been generated. For example, if generated from inheritance, from whom and when did you inherit the funds? If you sold a property or a business, what was the name of the business/address of the property and when did you sell it? If the funds were generated through employment, what was the nature of your work?

5. One-off deposit(s)/withdrawal(s) please provide details of any large one-off deposits or withdrawals expected during the next year including amount(s) and reason for the transaction(s).
We reserve the right to request further information and/or evidence to support your answers, before withdrawals are permitted. In addition, we may request further information/evidence from you during your account relationship with us, should the level of activity on your account change significantly.

I have decided to do this;

Leave all my savings in sterling in an onshore based savings account with some of the big boys. So let’s talk a generic sum here, we will call it 100k sterling for arguments sake. Split the 100k into 3 pots;

Pot 1 = 80k – Put this into a fixed rate bond with a maturity date no longer than 12 months, as 12 months is the maximum you can do a forward Forex contract.

http://www.nationwide.co.uk/savings/...nd-monthly.htm

Pot 2 = 10k – Put this or keep it in an ISA tax free account, this is your emergency 10% of your forward contract should the markets go against you, .i.e. you fix at 2.5:1, but the market moves not in your favour, so Ozforex will ask you for a further 10% to protect against losses.

Pot 3 = 10k – Put this or keep it in an instant access account, you can get at it in no time, hours, when the rate hits what you deem “want”, then call up Ozforex, and do a forward contract, the length of the forward contract should be the same length as the time left for you fixed rate bond to mature.


Now the three accounts should all pay monthly interest, and you will be taxed locally in the UK at 20%. The accounts all need to be accessible over the internet, so you can either BACS or CHAPS the funds to your Forex account while living in Australia. The only thing I will say, in your instance, such a large amount may require you to be in the UK to initiate the CHAPS from your fixed rate bond account to your Forex account. With such a large amount, and so much to gain, I would book a flight home for a week to clear it all up should this be the case.

You will get far better rates onshore, even with 20% holding tax. You will still be entitled to your tax free allowance, this year £6475.00, so can claim back overpayment on your earned interest. But you will be liable to pay the ATO any difference in what you pay HMRC, to what you owe the ATO. But safety wise you will be better off, interest wise on your monthly income you will be better off. The only downside is maybe the flight home to initiate the CHAPS for the final transaction.

But the cost of a flight, and a hotel for a week, far out weighs what you lose exchanging today in relation to say exchanging in two years at 2.7:1. Also, its safer onshore, and I think if my sums are correct, you will earn more interest onshore, even with the holding tax, because it has to be paid either in the UK or Australia, and you get to keep your allowance.

Sooty.

Re: A question, valid, what would you do?
 

They don't exist in the UK anymore!

Re: A question, valid, what would you do?
 

Let me get this straight.

Now when I exchange, I will do a forward contract, by this I mean I will tie into an exchange rate on that day to do the exchange at a future date. Now on the day i tie in i must pay 10% down payment, and should the rate move against me anytime in the future, then the Forex Company will ask for a further 10% to cover any losses. By this I mean should i tie in at 2.5:1, then it moves up to 2.7:1.

Now I have two options, leave the money in a UK based onshore account, or move the money offshore to an account like the Nationwide Sterling account.

Now the offshore Nationwide Sterling account has a few benefits, as it is accessible from anywhere in the world, so when the rate hits what i want, i can do a CHAPS from the offshore account to the Forex account while living in Australia, i do not ever need to return to the UK. I receive the interest Gross free of UK tax, so pay the tax owed to the Australian Tax man. I can receive the interest monthly. The rate is not great, also should the bank go under I am not very well protected.

The onshore UK home based option has a few flaws. To help maximise monthly interest, I will need three accounts as I see it, a fixed rate bond with a maturity date no longer than twelve months, as this is the longest period i can do a forward contract, and i will need access to this cash eventually. An instant access account to hold my initial 10% down payment when the exchange rate hits my favourable rate. An ISA holding the other emergency 10% money should the exchange rate move against me after i have done the deal. Now i will be taxed at 20% on the interest, but i will be able to claim my personal allowance at the end of the tax year, and then pay the remainder to the Australian tax man. The interest will be paid monthly, so accessible in Australia. The problem arises when i want to do the deal, exchange the cash while living in Australia.

The onshore option requires me to CHAPS the first 10% when doing the deal. For this to work I either have to return to the UK, for one week to initiate the CHAPS transfers, .i.e. do all the paperwork, or find accounts where you can initiate CHAPS transfers over the phone or over the internet. I am currently with the Nationwide Building Society, to do a CHAPS i have to fill out a form then show ID at the branch, i cannot do it over the internet. We are talking three CHAPS transfers from UK based accounts, while living the other side of the world.

What would you do, any advice appreciated.

Re: A question, valid, what would you do?
 

I'm just wondering if there's a(n) ? accountant, ? financial advisor, ? tax advisor or someone that we could possibly consult (for a professional fee, of course) for impartial advice in matters like this?

I might very well soon be in a similar predicament (if the damn house sells, that is), and I'd certainly like to know what my options would be, as well!

Re: A question, valid, what would you do?
 

I think I'd buy me a couple of those russian internet brides.

Re: A question, valid, what would you do?
 

Its a tough one maybe, but a nice tough one if you get my drift, like my old fella used to say, "people who worry about money, have money, me, i have never had any money, so i have nothing to worry about"

The sceanario's posted on this thread, are about the food and drink of it all, at least they are posted for all to digest, what i/we do now i suppose is down to what you/i deem to be the ideal solution?

Suggs

Re: A question, valid, what would you do?
 

Hi

You might want to consider what the maximum compensation is of the governing body for the institution you are banking with.

UK is £35,000, but check on FSA website that
(a) your bank is registered with them, don't just assume it is,
(b) your different banks aren't actually part of the same bank but with different names as the £35,000 generally is per parent bank.
http://www.fsa.gov.uk/register/firmMainSearch.do
http://www.moneymadeclear.fsa.gov.uk...d_deposits.pdf - shows some "linked banks" for compensation purposes, but is not a full list, for that use the search function.

Isle of Man has a £50k compensation scheme, yet again, check your bank is registered. Be careful where the bit you are banking with is registered, for example most IOM accounts are registered in IOM, even if the parent company is an Irish or UK bank. See here http://www.gov.im/fsc/investor/dep_comp.xml

Irish, Netherlands and I think Belgium unilaterally increased their compensation to 100,000 euros, so the UK FSA compensation does not apply because their limit is lower. I guess you'd have to find the relevant financial regulator in each country to find out if your bank is registered with them. Most banks are keen to prove they are registered so there is often a link on their own websites to the relevant regulatory body / compensation scheme. Apparently there is currently some form of EU legislation being proposed because they want to align the countries compensation schemes.
http://www.moneymadeclear.fsa.gov.uk...pensation.html - note the list of foreign banks at the bottom of the page that are excluded from Uk compensation scheme.

I am not a financial advisor, please check the above because it may be inaccurate, and take no responsibility for anyone's actions..... but hope it may be of use.

Sarah

Re: A question, valid, what would you do?
 

It's been a good thread for me, i have learnt alot.

But my conclusive answer is, leave it all in the UK, similar to what Sooty has done. I will pay my tax in the UK at source at 20%; if i do not claim my tax free allowance in the UK, then the tax i pay in the UK, is more than the tax i would pay in Australia. Assuming the savings interest income is my sole and only income in the UK and Australia.

I will show the ATO how much tax i am paying the HMRC on my savings interest, at the end of the tax year, as i will have my statement, and certificate of tax deduction. This will be more than i would pay the ATO anyway, so evens stevens, i am at a loss.

I will bite into the capital over time, so to maintain my standard of living, until the exchange rate imroves, then move the lot across at a favourable exhange rate, say in six months or eighteen months time.

The best bit is, you can claim back you personal tax free allowance up to so many years back dated, so if you come back, or if you stay in Australia. Will the ATO find out you claimed your personal allowance back, who know's, but there is a saving there? Watch the fireworks go now in replies rerarding tax evasion, and how the ATO will find out and you will be burnt at the stake ha?;):fingerscrossed:

Re: A question, valid, what would you do?
 

wait

Re: A question, valid, what would you do?
 

Got no choice! Cheers!:fingerscrossed:

Re: A question, valid, what would you do?
 

No, that's been increased to £50,000.

Re: A question, valid, what would you do?
 

The chances of a UK institution going "down the pan", not sure it will happen, the 50k is a token gesture by the UK gov, rather alike the $1 million gesture the Australian Gov have put in place?

I just wish that exchange rate would improve? Could be along wait with this capping of Gilt yields and artificially keeping base rates low in the UK?

Suggs