The US dollar extended its recent losses on Thursday, in response to a much weaker-than-expected US GDP print.
Although some certainty seems to have returned, the last year has created new challenges and potential costs to moving abroad in 2021.
We’ve looked into some of differences you could face if you move abroad this year.
Challenges created by coronavirus restrictionsAs the UK’s vaccination rollout continues at an impressive rate, many other countries are a long way behind.
With this in mind, you’ll have to consider that wherever you are choosing to move to will likely have different restrictions, laws, and rules while coronavirus limits movement between countries.
It’s worth checking the extent of lockdowns and quarantine measures early using tools such as this one before deciding on travelling or shipping your belongings.
Furthermore, countries like Denmark are floating the idea of a ‘coronavirus passport’ for foreign travel.
Despite some criticisms, this could be a policy that other countries adopt as well through the year, which is another (albeit relatively small) cost and could take time to obtain.
Another important thing to keep in mind is that many countries will require you to produce a negative Covid-19 test and go into quarantine upon arrival, adding more cost and time moving abroad.
For example, arrivals in New Zealand are expected to pay for the quarantine cost of £1,630 for the first adult, then £500 for each additional adult and £250 for each child.
Post-Brexit changesBrexit has added additional hurdles for UK nationals planning to move to the EU.
While more legislation between the UK and the EU is yet to be rolled out, it is widely expected that UK expats moving to the EU could face increasing costs.
Brits moving to Spain, for instance, have switched to non-EU status, meaning tax increases such as those on income from rental property, or having to obtain new documentation such as a TIE card (identity card) at a cost.
Many countries will also require increased income requirements, meaning that you will have to earn a certain amount to live in certain countries throughout the EU. For instance, a number of EU countries now require you to be able to prove that you earn at least £2,000 (€2,223) a month.
While delays at ports to leave the UK have been well publicised for general haulage, the situation isn’t as clear for individuals with their personal belongings and more clarity will hopefully emerge soon.
As it stands, it’s possible you could be caught in the delays with customs clearing agents, so it’s worth having extra documents such as detailed inventories with values of your belongings, proof of residence or letters from European consulates. But it’s always worth seeking professional advice as the situation will likely develop.
Also, shipping prices look like they’ll head higher post-Brexit, with the UK now being officially outside of the EU. For more information about sending items to and from aboard, it’s worth looking at the Royal Mail’s webpage about Brexit changes.
And possibly most importantly for some, rules for taking your pet into the EU have changed. Pet passports issued before Brexit are now invalid and you’ll need to meet the new requirements and obtain health certificates.
Calculating cost of livingAs well as all the basic and initial costs of buying and renting a flat along with visa fees, you’ll also be faced with day-to-day living costs.
The basics, such as electricity, water, and everyday bills all tally-up and vary country-to-country and city-to-city.
And with the events of the last year, many countries are in a significantly different economic situation, with drastically changed outlooks that could affect the cost of living in future.
Before moving abroad, it’s well worth breaking down costs and income to see whether the place you have chosen is suitable for you and your budget.
Numbeo allows you to compare countries and cities for the cost of living and provides estimates of the average restaurant fees, taxis, trains, and other essentials, so that you can accurately approximate the cost of living well in advance.
The impact on cost caused by currency volatilityIn any normal year getting the most for your money when you transfer money abroad is important, but the heightened currency volatility over the past year and into 2021 has made it even more significant.
The Pound has strengthened recently as the UK’s economic outlook has improved on the UK government’s announcement of a lockdown exit plan and strong vaccination rollout. Additionally, Boris Johnson stated he is “optimistic” that all restrictions will end on 21st June.
However, currency volatility is a key cost to consider in moving abroad because the market can move higher or lower quickly.
For instance, if you transferred £200,000 to buy euros at the start of January this year at the GBP/EUR exchange rate of €1.10 you would have received €220,000. If you made the same transfer at the beginning of March with GBP/EUR at €1.15, you would get €230,000, a difference of €10,000.
The additional challenges and costs of moving abroad in 2021 shouldn’t be off putting if you’re thinking about moving overseas.
It’s possible to overcome all the challenges with good planning, and as the global situation gradually improves, the challenges and costs will change.
Currencies Direct is one of Europe's leading non-bank providers of currency exchange and international payment services. Since we were formed in 1996, we've maintained our focus on providing innovative foreign exchange and international currency transfer services to corporations of all sizes, online sellers and private individuals. We have also expanded our services to provide dynamic and pioneering "business to business" solutions to help companies, tier 2/3 banks and other non-bank financial institutions to process their international payments. Our headquarters are in the City of London (United Kingdom) and we have operations in continental Europe, Africa, Asia, and the United States. Currencies Direct is jointly owned by private equity firms Palamon Capital Partners and Corsair Capital.