Currency and International Transfer Considerations for Expat Families Paying for Care

If you live abroad and are paying for a parent's care back in the UK, or funding it from overseas income or savings, there is a practical dimension that is easy to underestimate: the business of actually moving money across borders, and the effect of exchange rates, fees and timing.

It might sound like a minor detail, but because care is a significant, ongoing cost, getting this right can save a surprising amount of money and hassle over time. Here is what to consider. This is general information rather than financial advice, and we will point you towards the right help for decisions.

Why it matters more than you might think

Care is not a one-off purchase. It is a substantial cost paid regularly, often over months or years. So when you are funding it from another country or in another currency, even small differences in exchange rates and transfer fees add up considerably over time.

A little attention to how you move the money, rather than simply defaulting to the easiest option, can make a real difference to what the care actually costs you across the whole period. It is well worth a bit of thought at the outset.

Exchange rates and your exposure

If you are converting from another currency, say euros, dollars or dirhams, into pounds to pay for care, the exchange rate matters, and it moves constantly.

If your currency weakens against the pound, the care becomes more expensive for you. If it strengthens, it becomes cheaper. And because care is an ongoing cost, this exposure continues for as long as the care does. It is worth being aware of this, building a little room into your budget for exchange rate movement, and not assuming that today's rate is what you will always pay.

The hidden cost of transfers

When you send money internationally, there are usually two costs, and the larger one is often the less visible:

• The transfer fee, a charge for each transaction, which is usually clearly stated.
• The exchange rate margin, the difference between the "real" mid-market exchange rate and the rate you are actually given. This is where providers often make much of their money, and it can quietly cost far more than the visible fee, especially over many payments.

High street banks, while convenient, typically offer poorer exchange rates and higher costs than specialist alternatives. Over the course of funding care, the difference can be significant, so it pays to look beyond the headline fee to the total cost of each transfer.

Your options for moving money

Broadly, there are a few routes, and it is worth comparing them on total cost rather than convenience alone:

• High street banks. The most familiar and convenient option, but often the most expensive, with wider exchange rate margins and fees.
• Specialist money transfer services. These online providers typically offer exchange rates much closer to the real rate, and lower fees, than banks. For regular international payments, they are often considerably cheaper.
• Currency brokers. These can be helpful for larger sums, and often offer tools to manage the uncertainty of moving exchange rates, which we come to next.

Whichever route you consider, it is worth comparing a few providers on the combination of exchange rate and fees, and reading the terms, rather than assuming they are all much the same.

Managing the uncertainty

Because care is an ongoing cost, the unpredictability of exchange rates can make budgeting harder. A few approaches can help bring some certainty:

• Regular payment arrangements. Setting up recurring international transfers can be more convenient and sometimes cheaper, and ensures care payments are never missed.
• Forward contracts. Some currency brokers allow you to fix an exchange rate for a future date or period, giving you certainty over the cost for a while. This can be genuinely helpful for budgeting a large, ongoing expense, though it is a financial arrangement, so it is wise to understand it fully and take advice.
• Holding funds in the UK. Transferring a larger sum into a UK bank account, perhaps when rates are favourable, can simplify paying UK care bills and reduce the friction and cost of many small transfers. It can also make the practicalities of paying much easier from abroad.

Practical setup tips

Beyond the money itself, a smooth setup matters, particularly when you are managing things from another country:

• Make payments reliable. Set up a dependable, regular way to pay, so care costs are never accidentally missed from afar.
• Consider a UK bank account. Having a UK account for your parent, or for a representative managing their affairs, can make paying UK bills far simpler.
• Sort the authority to act. Make sure whoever manages the finances, whether that is you or someone holding a Lasting Power of Attorney, can do so smoothly from wherever they are.
• Keep good records. Retain records of transfers and payments, which can matter for tax and for any financial assessment.

Our guides to caring for a parent from abroad and how overseas pensions are assessed in a means test cover related ground that expat families may find useful.

Don't forget tax and advice

Moving money internationally, and funding care from abroad, can have tax and regulatory dimensions depending on your circumstances and the countries involved. For anything significant, it is well worth speaking to a financial adviser, and where relevant a cross-border tax specialist, who can help you do things in the most sensible and cost-effective way. This is not something to guess at where large or ongoing sums are concerned.

We're used to families around the world

At Edyn, we support families based all over the world who are arranging and funding care for a loved one in the UK, so the practicalities of doing this from abroad are familiar to us. We are always happy to talk through how payments work and help make the process as smooth as possible for your situation, wherever you are.

If you would like to discuss arranging and funding care for a parent in the UK from overseas, we would be very glad to help.

Book a free care advice call, or give us a ring on 020 3970 9900.

This guide offers general information only and is not financial, tax or currency advice. Exchange rates, fees and providers vary and change, so please compare options for yourself and seek advice from a qualified, regulated adviser for decisions involving significant or ongoing sums.