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

Living France - - Les Pratiques -

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.

PLAN­NING AHEAD

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

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