Whether it be family in another country or buying property abroad, there are many reasons you may wish to send money overseas. We list the best and cheapest international money transfer providers on the market.
According to the World Bank, sending $200 (or about £160) abroad from the UK in 2023 would cost around $11.94 (or about £9.50).
While this was cheaper than the global average, the UK is one of the more expensive countries in the G8 for international money transfers. Only France and Japan featured higher averages.
Luckily, there are cheaper ways to send money abroad than the World Bank average figures. So below we’ve explained:
Read more: The best and cheapest travel money providers
What is an international money transfer?
An international money transfer is a way of sending your cash abroad. For example, if you had a brother living in Spain, you would need to make an international money transfer to get your funds from the UK to his Spanish bank account.
There are a variety of reasons why you may wish to move money abroad. Sending money to a family member is one example, but you may need to make a money transfer to purchase property abroad or to facilitate a business transaction.
When you make an international money transfer your money will be converted from pounds to foreign currency – so it’s best to keep an eye on the exchange rate in advance to get an understanding of the value of your pounds.
For larger transactions, such as buying property abroad, even a slight change in the exchange rate can make a significant difference to the value of your money. Our guide explains how you can protect yourself in these situations from currency fluctuations.
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How to send money abroad
According to the World Bank, there are four ways to send money abroad. Below we list and explain these methods in more detail:
A bank
While a bank transfer may be the most convenient way of sending money abroad, it can also be the most expensive. International money transfers via the bank, as a global average, cost 11.48% of the money sent. It works out to more than double the cost of the global average for a mobile operator at 4.47%.
In the UK, banks can also be expensive. Take Lloyds Bank, it charges a standard £9.95 fee for sending money abroad, unless your money is being converted to euros.
At first glance it looks like a great option if you are sending a large sum of cash, but your recipient needs to pay the additional fees. This includes a correspondent bank fee, which ranges between an added £12 and £20, and a mark up on the exchange rate, which ranges between 3.55% and 1.50%. It means the total amount your transaction costs starts between £21.95 and £29.95 before the exchange rate mark-up takes effect.
Lloyds Bank isn’t an anomaly, and other high street banks include similar charges.
Since banks are regulated differently to other financial institutions, sending money through this method does mean you’ll be protected by the FSCS compensation scheme if your bank went bust during the transaction.
Using a bank might also be a great option if you’re making regular payments overseas. Some international providers offer specialist accounts which offer international money payments at reduced costs. One example is HSBC’s Global Money Account which lets you send money to nearly 50 different countries in 50 different currencies without any HSBC or intermediary fees.
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A specialist provider
Officially labelled as Money Transfer Operators (MTOs) by the World Bank, a specialist provider is another way of sending money abroad.
Examples of MTOs include Xe and Western Union, which are also regulated by the Financial Conduct Authority (FCA) but don’t enjoy the same FSCS protection banks do.
If you are thinking of using one of these providers, make sure they’re FCA authorised rather than FCA registered. In theory, you should get your money back from an FCA authorised firm if it fails because it’s mandated to keep your money separate from its own funds. This means if it ever faces liquidation you should still be able to access your funds.
FCA registered companies, meanwhile, just need to ensure that none of their senior staff have a criminal record.
Out of good faith, many FCA registered firms will safeguard your money, but there’s still no legal protection or guarantee that your money is protected if it went bust.
You can check the status of your chosen MTO by checking the FCA register. They are classed as “Authorised payment institutions” and differ from e-money institutions, which are explained below.
Specialist providers can be a great choice because they often work out cheaper than banks to send money overseas. Globally, the World Bank said the global average for sending money via a MTO was 5.33%. In the UK, a specialist provider like Wise will charge around £5 to send £1,000 to the US.
Read more: What is an exchange rate?
The Post Office
While the World Bank lists the Post Office to transfer money overseas, in the UK it partners with Western Union or MoneyGram to facilitate these transactions.
These are both FCA authorised firms, and we’ve listed more about Western Union, a best buy provider, below.
Read more: Best Euro to pound exchange rates
A mobile operator
The final way to send money abroad is via a mobile provider or an e-money institution. An example of one is PayPal or Revolut.
These institutions must safeguard your money, so in the event it goes bust you should be able to reclaim any lost funds. However, unlike losing your money through a bank, nothing is guaranteed.
Many e-money institutions also offer electronic wallets to keep your cash, but again these differ from current accounts.
Fees vary depending on your provider. Paypal, for example charges 5% of the transaction amount with a minimum fee of 99p and a maximum fee of £2.99.
Read more: What is an IBAN
The best international money transfer providers
Below we’ve listed some of the best providers you can use to send money abroad. While the list predominantly lists specialist firms, we do mention a bank and an e-money provider which may be of value. All firms listed are FCA regulated.
– £2 fee for transfers below £250
– No transfer fee for anything above £250
– Allows forward contracts
Xe is the trusted money transfer and currency partner for the Times Money Mentor. It’s a Canadian-founded broker which has been operating for more than 30 years and can provide money in more than 200 countries.
One of its main perks is that it has several free-to-use tools that can help you monitor currency fluctuations and time your orders. This includes access to historical rates, a real time calculator, and an email updates system that notifies you when your chosen exchange rate drops below a certain threshold.
– Flat fee from £1.90
– Offers a highly rated app for money transfers on the go
Western Union is one of the most accessible ways to transfer money abroad. Not only does it provide a highly rated app on both Apple and Android devices, but it is also can easily be found across the country.
It’s one of the money transfer partners at the Post Office, which means you just need to pop into one of its stores to make your transaction. Plus, it’s also established a presence in many UK corner shops.
– Fees from 0.43%, making it one of the cheapest providers around
– Also offers an e-money account to spend money abroad
If you’re purely looking for the cheapest provider, then Wise will likely be a serious option. It differs from other providers because it uses the real exchange rate to process your transaction, so there’s no mark-up.
While Wise only sends money to just over 50 countries, which is less than some of its competitors, it does cover most major countries. Areas it doesn’t send money to include Iran and the Congo.
– Payments within European Economic Area (EEA) are free
– £5 fee for payments outside EEA
– Free transfer to other HSBC accounts
First Direct, the only bank mentioned on this list, is also a great option due to its affordable pricing. However, it’s worth noting that while you’ll incur a £5 fee at most, your recipient could expect other charges which will be deducted from their payment.
One of First Direct’s biggest perks is that it’s part of the HSBC banking group. This means if your recipient has a foreign HSBC account you can benefit from free-fee transactions.
– Fees vary depending on your plan
– Send money to over 160 countries
Revolut, an e-money institution, might be the cheapest option if you’re already using one of its premier subscriptions.
Its Ultra membership, which costs £45 a month, offers free international payments so it could be a cheap option if you’re making a number of transactions. It also comes with other perks too, such as 3 GB of data to use globally via an eSIM, various insurance policies, and up to 4.75% AER on your savings.
It could be a great option if you’re a small to medium sized business owner who regularly trades and visits overseas.
What do I need to send money abroad?
It all depends on how you intend to send your money.
For international payments via a bank you’ll need your recipient’s details and their BIC, IBAN or SWIFT code. Our guide explains the difference between these.
How to fund an international money transfer
There are a variety of ways to send cash abroad – some of which are cheap and efficient while others are longer and more expensive. They include:
- Wire transfer – This is where your money moves from one account to another. Wire transfers typically take longer to complete than other options
- International standing order – For regular payments, such as a business paying for goods overseas, a standing order can be an option
- Debit card – This might be a handy and speedy option if you’re using a specialist provider
- Credit card – A credit card should ideally be used in extreme circumstances when your options are limited. This is because it often incurs added fees as lenders class sending money abroad as a cash advance
What is the safest way to wire money overseas?
If you’re sending money abroad with an FCA authorised provider then your transfer should be safe.
At the very least, your firm should be FCA registered, so if there’s ever a problem that arises you have the right to complain to the Financial Ombudsman Service. In addition, using a firm on the FCA register will protect you from scams.
As mentioned above, if you’re looking for a provider with the best level of protection then a bank will likely be worth considering as your money will be covered by the FSCS protection scheme.
Read more: The email phishing scams to look out for in 2024
FAQs
Are international money transfers taxed?
This depends on your individual circumstances, like the size of your transfer and the countries involved in the transaction. If in doubt, consider speaking to a financial adviser for complicated situations.
How long does it take to send money abroad?
It depends on how you’re planning on sending money abroad. Bank transfers can take between one and three business days while specialist providers can transfer the money instantly.
Should I get a forward contract?
Forward contracts can be useful for larger transactions. Otherwise it can also be useful for planning ahead and providing a level of certainty.
Important information
Some of the products promoted are from our affiliate partners from whom we receive compensation. While we aim to feature some of the best products available, we cannot review every product on the market.
