If, like Prince Harry, you’re coming home to Britain, get your currency plan right first and you could save a princely sum.
As we have seen many times at Smart Currency Exchange, as exciting an adventure it is to move overseas, it can also be exciting to come back to the UK too. But once again, just like moving there, coming back requires a very significant currency exchange.
Prince Harry and Meghan are coming home. Reported across the national press this month, the Duke and Duchess of Sussex are leaving California and relocating to the UK, with their children due to start at British schools in September. It’s the highest-profile homecoming in years – and they’re far from the only Britons making the same decision.
For most returners, of course, the circumstances are rather more ordinary. Harry’s move is from dollars rather than euros, and he’s unlikely to be watching the exchange rate on the sale of a villa in Spain or France.
But for the thousands of less-heralded Britons weighing up a return from the continent, the money side of coming home is very real. It’s probably somewhere on a long list of things to organise, and quietly deciding how much of your life’s savings survive the journey, is the exchange rate.
Coming home is a currency event
When you moved abroad, you converted pounds into euros (or dollars, or dirhams) to build your new life. Coming back reverses that. You’ll be turning a euro-denominated life back into sterling: the proceeds from selling your overseas home, the savings sitting in your local bank, perhaps some investments, and – if you’re retired – the income you draw to live on.
These are often some of the largest sums you’ll ever move. And because the exchange rate is never still, the number of pounds they’re worth can change significantly between the day you decide to come home and the day the money actually lands in your UK account.
The risk hides in the timing
Selling a property abroad is rarely quick. Months can pass between accepting an offer and completing – and in that time, the pound-to-euro rate can move several percent in either direction.
So if you agree to sell your home for €400,000 you will probably be expecting to bring home a certain amount in sterling. How much may be critical – especially if you are in the process of buying a UK property.
If the pound strengthens against the euro before your money is converted, those euros buy fewer pounds. Then your UK budget will shrink, potentially by thousands, through no fault of your own. It’s the same volatility that catches out buyers on the way out, only now it’s working against your nest egg rather than your dream home.
The frustrating part is that this risk is invisible until it bites. Everything about the move can go perfectly – the sale, the paperwork, the packing – and you can still arrive home with meaningfully less than you’d planned for.
What you’ll likely be converting
It helps to map out everything that will need to come back before you start. For most returners, that includes some combination of:
- The proceeds from selling your overseas property
- Savings held in a local bank account
- Any locally held investments or pension arrangements
- Ongoing income – such as a UK or overseas pension – that you’ll now want landing in sterling
Each of these can be handled differently, and the order you tackle them in can make a real difference to how much you keep.
How to protect what you’ve built
The good news is that you don’t have to leave any of this to chance or to the rate on a random Tuesday. There are straightforward tools designed for exactly this situation.
Lock in a rate in advance. Once you know roughly what your property will sell for, a forward contract lets you fix today’s exchange rate for a future transfer, up to 12 months ahead. That means the sterling value of your sale can be protected the moment your price is agreed, so a swing in the market can’t erode it while you wait to complete.
Target the rate you want. If your timing is flexible and you’d like to aim for a particular rate, a market order can automatically buy your pounds if and when the market reaches your target, without you having to watch the screens.
Smooth the transition. In the handover period, when you may still have costs on both sides of the Channel, a regular payment plan can move money across at set intervals without you arranging each transfer by hand.
Get a plan, not just a rate. Perhaps most usefully, a dedicated currency account manager can help you sequence the whole thing – what to move, when, and how – around your sale and your move date, so the currency side supports your plans rather than surprising them.
Don’t overlook tax and timing
Where you are tax resident, and when, can have significant implications when you move between countries — sometimes affecting the best moment to sell, transfer or draw an income. These rules are personal and can be complex, so it’s well worth speaking to a qualified tax adviser before you commit to dates. Getting the sequence right on both the tax and the currency side, together, is what protects you best.
Talk to us early
Prince Harry’s homecoming will no doubt be smoothed by a team of advisers. Most people moving back don’t have that luxury – but the principle is exactly the same: plan the money side early, and don’t leave it to the rate on completion day.
The single most valuable thing you can do is plan the currency side sooner rather than later, ideally before your property is even on the market. The earlier you start, the more options you have to protect your money and the less you’re at the mercy of the market on the day.
At Smart Currency Exchange, we’ve helped thousands of people move their money – and their lives – across borders in both directions. If coming home is on your mind, talk to us about a currency plan built around your move. It could be worth thousands, and it costs nothing to have the conversation.
Smart Currency Exchange provides currency exchange and international payment services. We don’t provide tax, legal or financial advice; for those, please consult a suitably qualified professional.
