Brits paying millions to send money overseas

Brits are paying over £150 million a year in bank fees when transferring money abroad, according to a report published by Travelex.

The leading foreign exchange specialist commissioned the research to inform the launch of its new overseas money transfer service, Travelex International Payments, which offers customers a secure way to transfer money – and guarantees the lowest overall price with Travelex’s Price Promise.

The report shows that one in ten of those that have transferred money in the last year sent £10,000 or more. The amount of money being transferred was also found to be increasing a significant amount year on year. 15% of those questioned are now spending over £5,000 more than they were last year.

The average fee for money transfers was revealed as £17. Over a third of people regularly pay £20 or more, whilst one in twenty are used to paying over £40. Attitudes to fees are mixed. A fifth said they thought fees are generally expensive, yet more than half admitted to not actually checking the fees before they transferred their money. One in ten view the fees as a ‘necessary evil.’

With around 20 million Brits making overseas payments, approximately £153million is being paid in fees each year. This comes despite cheaper alternatives being available, with Travelex International Payments fee-free for transactions over £2,500 or just £7 for smaller payments, almost 60% cheaper than the £17 average fee.

Trends

The research also revealed a number of trends, including an increase in numbers of transfers for larger amounts. This was driven partly due to the economic downturn in the Eurozone, with one in eight of those questioned citing that they had spent more money on purchasing property than they did last year.  The most popular locations were Spain and France. The US also featured heavily. Nearly a quarter (23%) said they were taking advantage of cheaper prices abroad. Conversely, it is clear that the downturn has also had a negative effect on some Britons’ foreign assets, with one in five admitting that they were sending money abroad to pay off debts.

Methods of transfer

Banks are still the most popular method for transferring money abroad, despite the cost for consumers. Half of people had used a bank for their foreign transfers, yet under a third had used an international money transfer specialist.  Despite its perceived popularity, only one in ten had used Paypal for foreign payments.

A quarter of people were found to still go to their bank in person to transfer money abroad – surprising given that over 60% claimed that convenience was the main factor in choosing a transfer provider. Other important factors for choosing a provider were revealed as fees and trust, with 23% and 20% of people voting for those factors respectively.

A source of worry

When it came to perceptions of money transfer, one in five people admitted to worrying that the money they transfer will get paid into the wrong person’s account. Over 10% thought that their money may get stolen in an online transfer, and the same amount thought that if anything went wrong, they wouldn’t get their money back.

Travelex International Payments

The findings come as Travelex launches Travelex International Payments, an online and telephone based service which is backed by Travelex’s Price Promise. Designed specifically for those transferring larger amounts of money abroad, it offers a totally secure service from a trusted provider. Transactions can be booked Monday to Friday and support is available 24 hours a day, 7 days a week.

Philip Hanson, Travelex International Payments, says: “It’s clear that Brits are increasingly sending money abroad, and are paying a significant amount in fees by relying, in the main, on their bank. It’s also apparent that it can be a stressful experience. We’ve set up Travelex International Payments to address exactly these issues and provide a safe, secure and trusted method of sending money overseas. Further, our Price Promise guarantee ensures you’ll get the best overall price, and if you find a better quote, we’ll beat it.”

For more information, visit travelex.co.uk.