Time is money
If you’re planning to move to France in 2016 then organising your finances early can really pay off, as Laura Parsons explains
With the year now well under way, many of us may have let our resolutions fall by the wayside, but if you’re thinking of moving to France this year, make it your mission to reap the benefits of getting organised early on.
When planning any move overseas, there’s always plenty to think about and get to grips with – from deciding where you’re going to live to finding employment and sorting out healthcare. But something anyone moving overseas should take the time to look into during the initial planning stages of moving to France is foreign exchange, and the currency transfer options available to them.
If you haven’t had much experience with foreign exchange in the past, you might not realise just how dramatically exchange rates can shift, and what kind of impact their movement can have on your currency transfer.
Exchange rates are highly volatile, with political, economic, social and even environmental factors all inspiring some sort of movement. The difference of just a couple of cents per pound can make a huge impact on how much your transfer is worth, so securing a good exchange rate is the key to making your money go further.
If we use 2015 as an example, the pound to euro (GBP/EUR) exchange rate hit a low of 1.2736 and a high of 1.4407 over the course of 12 months. A number of events, including the Swiss National Bank (SNB) removing its cap with the euro, the UK’s general election in May and the near expulsion of Greece from the eurozone all contributed to the GBP/EUR pairing’s volatility. After hitting a succession of over seven-year highs against the euro, concerns that the rate of output in the UK economy was slowing saw the pound reverse gains towards the close of the year to enter 2016 trading in the region of 1.35.
However, the difference between the year’s highest and lowest rates was roughly 17 cents. To put this in real terms, if you had £250,000 to move to France your money would have been worth €318,400 when the exchange rate was at its lowest point, but €360,175 when it was at its highest. This means that moving your money when the market was in your favour, rather than when it was against you, could have netted you an extra €41,775.
Having over €40,000 more at your disposal could have really widened your property search or helped pay for the renovation of your new home. Given that even the difference of a couple of cents per pound can result in significant savings, having some idea of how exchange rates are performing is essential if you don’t want to lose out.
MAKE YOUR MOVE
Although exchange rates can be unpredictable, there are steps you can take to help ensure you move your money at the right time. By registering with a currency broker long before you need to make your transfer, you’ll benefit from industry insight and specialist guidance.
While banks offer foreign exchange services, they don’t employ currency experts. Brokers, on the other hand, can keep you updated with the latest market news and currency trends to ensure you plan your transfer for the most cost-effective time. Some currency brokers are also able to undercut the exchange rates offered by banks by as much as 90%, helping you get considerably more for your money.
Additionally, as currency brokers are specialists in their field, they can also provide you with access to services which banks can’t, such as the option to fix a favourable exchange rate for up to two years in advance of a transfer.
By fixing a rate in this way, you protect your transfer from unexpected dips in the exchange rate – always handy if you need to budget for a French property purchase.
If you leave organising your currency transfer to the last minute, you could end up moving your money when market conditions are against you, and thus achieve considerably less than you could have if you’d made your transfer when the exchange rate was higher.
For that reason, it’s worth exploring your options early on and registering with a reputable currency broker well in advance of needing to make a transfer. Registering with a broker should be free and come with no obligation to trade. It’s also important to pick a currency broker who is authorised by the FCA and operates segregated client accounts to maintain total fund security.
If you’re still uncertain about which company to use, take a look at online reviews. If other people have rated a broker highly, you can feel more confident in how they’re going to look after your requirements. torfx.com
The difference of just a couple of cents per pound can make a huge difference to how much your transfer is worth