Best FI tips for a returning expat?

[shanghaiMMM]

Hi all,

I've been into MMM and FIRE for a few years but I was working abroad. I've since returned to the UK for a bit of Brexit and lockdown and I feel a bit out of the loop FI-wise here.

- What do you use to track your spending? (I used to use YNAB until it went subscription)
- Any great banks I should look at?
- Any chance of travel hacking in UK? Amex Gold seems best bet on my quick research?
- What investment broker do you use?
- Any general UK FIRE tips gratefully received!

[celticblue]

Hi

Welcome back. Main tip would be to make sure you have bought back any years of National Insurance you missed. It's dirt cheap if you were on an overseas contract. I didnt know about this and was too late to retrospectively get all the years. I regret it

[never give up]

Phew about time too shanghaiMMM, we've missed you :-)

- What do you use to track your spending? (I used to use YNAB until it went subscription)

I'm a bit old fashioned and just do what I presume the Victorians would have done and use my own well designed spreadsheet. I always think a custom approach provides more meaningful data and it's private rather than being in some app that could cease to exist at any time or change to a format I don't like etc. I go through my bank accounts and credit card statements once a month and log against various categories allowing me to understand my own personal inflation rate. It's all terribly exciting.

- Any great banks I should look at?

If you can be bothered it may be worth setting up a couple of dummy bog standard basic accounts and using them to switch to some of the good accounts with switching incentives. The MoneySavingExpert website is your friend for understanding the best accounts, cards, ISA's etc across the breadth of the market.

- Any chance of travel hacking in UK? Amex Gold seems best bet on my quick research?

I don't know much about this. Again MoneySavingExpert is probably your friend. They have a section on travel and cards with rewards etc.

- What investment broker do you use?

https://monevator.com/find-the-best-online-broker/
This will depend on how much you have to invest and how often you trade etc. The Monevator guide above and the comparison table linked towards the bottom is your friend here.

- Any general UK FIRE tips gratefully received!

Identify and understand your objectives and ensure a full comprehension of how mortgages, ISA's, pensions and tax works to tailor a plan accordingly. The rest of this UK tax board will have lots of helpful stuff as will the Monevator site in general. If you need specific advice a Case Study on this very forum may give you more precise info.

[Playing with Fire UK]

Welcome back!!

Head for Points is great for points. Amex now have a two year cool-off period for bonuses, but if you are willing to put in the effort this is the strategy for a couple to maximise points. The moneysavingexpert website has a tool to check acceptance which could be useful as you might have a thin credit file in the UK? If your chances of acceptance look low, it might be worth calling Amex rather than getting multiple applications on your credit file. Not everywhere will accept Amex, so you'll need a Visa or Mastercard as well (Co-op and John Lewis have cash-back or vouchers). If you get a Curve card (referral codes are available for a starting bonus) you can use a credit card (but not Amex) for some payments that only take debit card to enhance credit card spend.

First Direct has great service, but pays no interest; when interest rates aren't terrible it has decent linked monthly savings accounts, but not right now, it's part of HSBC. Look at either Santander 123 Lite (£2 per month, no interest)or 123 (£5 per month, pays some interest) account to see if either make sense for you, they provide cashback on some bills - the amounts recently changed so check you are looking at the most recent versions.

I use MoneyDashboard to track spending, it uses open banking to get read-only data from banks, but you need to update credentials every 90 days and I find that a bit of a pain. I dislike their actual dashboard so export everything into Excel, but it's easier than recording every transaction. There are some banks that allow you to link all your accounts to see a single view of all the transactions, I haven't used any.

[shanghaiMMM]

Hi

Welcome back. Main tip would be to make sure you have bought back any years of National Insurance you missed. It's dirt cheap if you were on an overseas contract. I didn't know about this and was too late to retrospectively get all the years. I regret it

Yes! I'm just looking into this at the moment. It will cost me over £7k to pay it all back, which will feel a bit of a sting. I can pay 4 partial years back for about £1500 so considering that. That will put me up to 10 full years.

I'm receiving child benefits now which contributes to NI I believe and will do so for 12 years, so that's good. Hopefully, I'll get near enough to 30+ years by the time I'm set to receive anything.

[shanghaiMMM]

Phew about time too shanghaiMMM, we've missed you :-)

- What do you use to track your spending? (I used to use YNAB until it went subscription)

I'm a bit old fashioned and just do what I presume the Victorians would have done and use my own well designed spreadsheet. I always think a custom approach provides more meaningful data and it's private rather than being in some app that could cease to exist at any time or change to a format I don't like etc. I go through my bank accounts and credit card statements once a month and log against various categories allowing me to understand my own personal inflation rate. It's all terribly exciting.

- Any great banks I should look at?

If you can be bothered it may be worth setting up a couple of dummy bog standard basic accounts and using them to switch to some of the good accounts with switching incentives. The MoneySavingExpert website is your friend for understanding the best accounts, cards, ISA's etc across the breadth of the market.

- Any chance of travel hacking in UK? Amex Gold seems best bet on my quick research?

I don't know much about this. Again MoneySavingExpert is probably your friend. They have a section on travel and cards with rewards etc.

- What investment broker do you use?

https://monevator.com/find-the-best-online-broker/
This will depend on how much you have to invest and how often you trade etc. The Monevator guide above and the comparison table linked towards the bottom is your friend here.

- Any general UK FIRE tips gratefully received!

Identify and understand your objectives and ensure a full comprehension of how mortgages, ISA's, pensions and tax works to tailor a plan accordingly. The rest of this UK tax board will have lots of helpful stuff as will the Monevator site in general. If you need specific advice a Case Study on this very forum may give you more precise info.

Thanks for the welcome back, it's good to be back (mainly...). Just having a scroll through your journal, fun reading!

OK, looks like I need to check out the MSE website a bit more thoroughly.

Cheers!

[shanghaiMMM]

Welcome back!!

Head for Points is great for points. Amex now have a two year cool-off period for bonuses, but if you are willing to put in the effort this is the strategy for a couple to maximise points. The moneysavingexpert website has a tool to check acceptance which could be useful as you might have a thin credit file in the UK? If your chances of acceptance look low, it might be worth calling Amex rather than getting multiple applications on your credit file. Not everywhere will accept Amex, so you'll need a Visa or Mastercard as well (Co-op and John Lewis have cash-back or vouchers). If you get a Curve card (referral codes are available for a starting bonus) you can use a credit card (but not Amex) for some payments that only take debit card to enhance credit card spend.

First Direct has great service, but pays no interest; when interest rates aren't terrible it has decent linked monthly savings accounts, but not right now, it's part of HSBC. Look at either Santander 123 Lite (£2 per month, no interest)or 123 (£5 per month, pays some interest) account to see if either make sense for you, they provide cashback on some bills - the amounts recently changed so check you are looking at the most recent versions.

I use MoneyDashboard to track spending, it uses open banking to get read-only data from banks, but you need to update credentials every 90 days and I find that a bit of a pain. I dislike their actual dashboard so export everything into Excel, but it's easier than recording every transaction. There are some banks that allow you to link all your accounts to see a single view of all the transactions, I haven't used any.

This is very useful stuff, thanks very much.

My wife is American so I'm investigating whether or not she can get the excellent American cards (Chase etc) and use them over here without much penalty. I *think* it's possible so I'll be looking into that option too.

[celticblue]

Hi

Welcome back. Main tip would be to make sure you have bought back any years of National Insurance you missed. It's dirt cheap if you were on an overseas contract. I didn't know about this and was too late to retrospectively get all the years. I regret it

Yes! I'm just looking into this at the moment. It will cost me over £7k to pay it all back, which will feel a bit of a sting. I can pay 4 partial years back for about £1500 so considering that. That will put me up to 10 full years.

I'm receiving child benefits now which contributes to NI I believe and will do so for 12 years, so that's good. Hopefully, I'll get near enough to 30+ years by the time I'm set to receive anything.

Hi. That sounds more than expected. For myself I was able to purchase NI years back working abroad  for less than 200 pounds per year for qualifying years. For the years I am not covered for its about 800 per year.  Even at 800 it works out just about worthwhile. But I am FIRE so pretty sure I won't bel gong back to work to get more years via employment

[shanghaiMMM]

Hi

Welcome back. Main tip would be to make sure you have bought back any years of National Insurance you missed. It's dirt cheap if you were on an overseas contract. I didn't know about this and was too late to retrospectively get all the years. I regret it

Yes! I'm just looking into this at the moment. It will cost me over £7k to pay it all back, which will feel a bit of a sting. I can pay 4 partial years back for about £1500 so considering that. That will put me up to 10 full years.

I'm receiving child benefits now which contributes to NI I believe and will do so for 12 years, so that's good. Hopefully, I'll get near enough to 30+ years by the time I'm set to receive anything.

Hi. That sounds more than expected. For myself I was able to purchase NI years back working abroad  for less than 200 pounds per year for qualifying years. For the years I am not covered for its about 800 per year.  Even at 800 it works out just about worthwhile. But I am FIRE so pretty sure I won't be gong back to work to get more years via employment

Congrats on being FIRE!

I think before I FIRE I'll get a decent amount of years contribution, even if not quite the maximum.

[Kwill]

My wife is American so I'm investigating whether or not she can get the excellent American cards (Chase etc) and use them over here without much penalty. I *think* it's possible so I'll be looking into that option too.

I'm an American, and I have a US credit card through a credit union that I use occasionally as an emergency back-up or when travelling in the US or a third country. It gives 1.5% cash back and doesn't charge international transaction fees, which makes it much better than my UK credit cards when I'm not in the UK. But I think they use currency exchange rates that are in their own favour, so I wouldn't use it in the UK. It just seems simpler to use one currency at a time. Similarly, my US ATM card charges a fee overseas so isn't good for the UK, but the US card fee is less expensive than the UK card to use in a third country.

[shelivesthedream]

Vanguard has reached the UK! https://www.vanguardinvestor.co.uk/ I'm very happy with them. Simple to use, excellent customer service. We have ISAs and SIPPs - alas they don't do LISAs, which we have at Hargreaves Lansdown.

We have a Santander 123 lite and even with our minimal bills we are making a few quid on it every month. In fact, they recently changed the payout structure to pay more for mustachian bills (genuine essentials) and less for unmustachian bills (telly and the like).

I also use a spreadsheet. Our outgoings are made up of few enough transactions that it only takes fifteen minutes once a month to type in all the new numbers. Our investments are simple enough that it's a similar fifteen minutes to update once a quarter. And I can track budget categories particular to us, like "shoe repair" and "coffee".

[ExitViaTheCashRamp]

- What do you use to track your spending? (I used to use YNAB until it went subscription)

 If you still have a key somewhere YNAB 4 still works fine on Win 10. I brought my copy via steam in 2014 and its still going strong.

[vand]

Not sure what you personal situation is, shanghaiMMM (will you have to change your username?)

But the path of least resistance in the UK is well established, and is unsurprisingly built upon taking maximum advantage of the extraodinarily generous tax shields available to us - pensions, LISAs & ISAs.

In terms of small things to help keep your living costs down, I would always emphasize checking your current utilities and subscriptions and make sure you're on the most cost-effective plan available.

I recently did this and saved:

£2pm on Mobile plan
£2pm on my Audible subscription
£20pm on my Internet
£20pm on my water bill (got a water meter installed)
£7pm cancelling my Amazon Prime (and instead sharing my wife's AP with the Household feature)
£10pm switching all my lightbulbs to high efficiency LED lights
£6pm applying for the Coronavirus WFH tax relief


Over time it's easy to let your costs accumulate over the bare minimum even when you think you're already pretty lean. The small gains all add up and make an eventual difference.

[shelivesthedream]

I for some reason cannot find it now, but there exists on the forum (I thought in UK tax?) a thread about default investment order for the UK. I think @Playing with Fire UK started it.

[vand]

I had a stab at this "UK investment order" thing myself. In fact it was going to a larger project that I haven't really managed to get off the ground yet. Anyway, I came up with this:


**********************

Do you have any money left over at the end of each month after meeting your everyday living costs?   
Y   Proceed to next step
N   Reduce your living costs and/or increase your take-home income by all means necessary. Do not proceed any further until you have met this.
      
Do you have an Emergency Fund? Typical recommendation is 1 month's living expenses or £1000.    
Y   Proceed to next step
N   Keep piling cash until your EF is adequate, then proceed to next step
      
      
Are you contributing enough towards your work pension to take advantage of the maximum employer match?   
Y   Proceed to next step
N   Contribute the full amount required to gain your full employer match, then go back to step 1
      
      
Have you paid off your "bad debt" - Debt that is either at a higher interest rate AND/OR debt taken out to finance consumption   
Y   Proceed to next step
N   Use all you spare cash to eliminate ALL bad debt, only proceed to next step when bad debt has been eliminated
      
      
Do you have a cash reserve? This expands the emergency fund to typically 3-6 months' living expenses  and allows you to plan further ahead and gives you a buffer to put a plan in place if required rather than panicking at any setbacks   
Y   Proceed to the next step
N   Build your cash buffer at least in parallel with the next steps in the process. Proceed to the next step when you feel comfortable doing so
      


You should have a positive net cashflow now, ie put yourself on a stable base ready to invest      
      
      
Is your marginal tax rate in the higher-rate tax band (50-150k) after exploiting the full employer pension match?   
Y   Increase your personal pension contribution further until your taxable income falls into the standard rate and/or you have maxed the 40k annual pension allowance
N   Skip the next 3 steps, down to LISA question
      
      
      
Do you still have spare cash to Invest?   
Y   Excellent, proceed to the next step
N   Congrats, you've invested as much as you are able to currently in the most tax efficient manner
      
Are you still taxed at the higher marginal rate (40%+) after maxing out the annual allowance?   
Y   Consider taking advantage of Pension Carry Forward rules to continue to gain tax relief at the higher rate until you can get into the standard rate tax band
N   Go to the next step
      
Are you still taxed at the higher rate after using as much Carry Forward as possible?   
Y   You'll have to take your pay some tax at 40% I'm afraid. Take it with grace and humility then go to the next step
N   Great, you've dodged the higher rate band for this year. Move onto the next step.
      
      
Are you aged 18-40 and eligible for a Lifetime ISA (LISA)?   
Y   You should probably max out your LISA as a next step, as you will receive tax relief at any grow is shielded from any CGT, income, dividend or any other tax when you come to withdraw from it (current age >60). This beats both standard pension contributions (either direct employee contribution or salary sacrifice) and standard ISAs from a tax efficiency perspective.
N   Too bad. Go to the next step.
      
      
Do you still have spare cash to Invest?   
Y   Excellent, proceed to the next step
N   Congrats, you've invested as much as you are able to currently in the most tax efficient manner
      
      
Does your employer run salary sacrifice pension contribution scheme?   
Y   You should probably take advantage of this as the most efficient tax shield available to you. Put in as much as you can
N   It's quite marginal between employee pension contributions and a standard ISA
      
      
Do you still have spare cash to Invest?
Y   Fill up standard ISA allowance to annual £20k limit (less any LISA allowance you were elegible for)
N   Congrats, you've invested as much as you are able to currently in the most tax efficient manner
      
      
Do you still have spare cash to Invest?   
Y   Invest in general taxable account
N   Congrats, you've invested as much as you are able to currently in the most tax efficient manner

Do you still have spare cash to Invest?   
Y   Send it to me in cash in an unmarked brown evelope
N   Congrats, you've invested as much as you are able to currently in the most tax efficient manner

[shanghaiMMM]

My wife is American so I'm investigating whether or not she can get the excellent American cards (Chase etc) and use them over here without much penalty. I *think* it's possible so I'll be looking into that option too.

I'm an American, and I have a US credit card through a credit union that I use occasionally as an emergency back-up or when travelling in the US or a third country. It gives 1.5% cash back and doesn't charge international transaction fees, which makes it much better than my UK credit cards when I'm not in the UK. But I think they use currency exchange rates that are in their own favour, so I wouldn't use it in the UK. It just seems simpler to use one currency at a time. Similarly, my US ATM card charges a fee overseas so isn't good for the UK, but the US card fee is less expensive than the UK card to use in a third country.

That's good to know, thanks.

My American friend recently applied for the Chase Sapphire whilst in Poland and hit the minimum spend to get the 60,000 points. He said he hasn't had any issues using it in Poland. There are no international transaction fees as you mentioned, although he said the exchange rate seemed to be the same as the going rate. Perhaps I'll read the fine print for that bit! If we can get a few bonuses and then earn enough points to visit her family every few years (which we will be doing regardless), then that would be a great way to reduce our average spending.

[shanghaiMMM]

- What do you use to track your spending? (I used to use YNAB until it went subscription)

 If you still have a key somewhere YNAB 4 still works fine on Win 10. I brought my copy via steam in 2014 and its still going strong.

Damn Macbook :(

I like the look of MoneyDashboard as someone mentioned. Does anyone else use it? If not, I think a good old fashioned spreadsheet may be in order.

[shanghaiMMM]

Vanguard has reached the UK! https://www.vanguardinvestor.co.uk/ I'm very happy with them. Simple to use, excellent customer service. We have ISAs and SIPPs - alas they don't do LISAs, which we have at Hargreaves Lansdown.

We have a Santander 123 lite and even with our minimal bills we are making a few quid on it every month. In fact, they recently changed the payout structure to pay more for mustachian bills (genuine essentials) and less for unmustachian bills (telly and the like).

I also use a spreadsheet. Our outgoings are made up of few enough transactions that it only takes fifteen minutes once a month to type in all the new numbers. Our investments are simple enough that it's a similar fifteen minutes to update once a quarter. And I can track budget categories particular to us, like "shoe repair" and "coffee".

I really ought to transfer to Vanguard. I'm with Fidelity at the minute, just because that's who I chose a few years ago. I think the average fee I'm paying is about 0.35% so it's a no-brainer really.

Might be a dumb question, but Vanguard says it can take up to 30 days to transfer. Does anyone know how long my money will be out of the market for during the process?

[never give up]

I for some reason cannot find it now, but there exists on the forum (I thought in UK tax?) a thread about default investment order for the UK. I think @Playing with Fire UK started it.

I think you’re referring to this one shelivesthedream.

https://forum.mrmoneymustache.com/uk-tax-discussion/basic-investment-advice-for-uk-beginners/

[shanghaiMMM]

I had a stab at this "UK investment order" thing myself. In fact it was going to a larger project that I haven't really managed to get off the ground yet. Anyway, I came up with this:


**********************

Do you have any money left over at the end of each month after meeting your everyday living costs?   
Y   Proceed to next step
N   Reduce your living costs and/or increase your take-home income by all means necessary. Do not proceed any further until you have met this.
      
SNIP

Do you still have spare cash to Invest?   
Y   Send it to me in cash in an unmarked brown evelope
N   Congrats, you've invested as much as you are able to currently in the most tax efficient manner

That's a pretty great set of instructions Vand! Thanks. You should continue your project, I'm sure it would be of use to many.

I'm not working right now, but I'll be back to check your list when I'm working again.

In fact, here's a very general question for everyone. My wife will be working online when her UK visa (pain in the arse) is sorted. I'm a teacher, so can pretty much work anywhere. We don't plan to stay in our current location; does anyone have a favourite LCOL area?

I am leaning towards the Newcastle area as I have some family there, I lived there for a short time and enjoyed it, beach, countryside, friendly locals and fairly LCOL, housing etc.

[shelivesthedream]

I for some reason cannot find it now, but there exists on the forum (I thought in UK tax?) a thread about default investment order for the UK. I think @Playing with Fire UK started it.

I think you’re referring to this one shelivesthedream.

https://forum.mrmoneymustache.com/uk-tax-discussion/basic-investment-advice-for-uk-beginners/

Thank you!

[Kwill]

My wife is American so I'm investigating whether or not she can get the excellent American cards (Chase etc) and use them over here without much penalty. I *think* it's possible so I'll be looking into that option too.

I'm an American, and I have a US credit card through a credit union that I use occasionally as an emergency back-up or when travelling in the US or a third country. It gives 1.5% cash back and doesn't charge international transaction fees, which makes it much better than my UK credit cards when I'm not in the UK. But I think they use currency exchange rates that are in their own favour, so I wouldn't use it in the UK. It just seems simpler to use one currency at a time. Similarly, my US ATM card charges a fee overseas so isn't good for the UK, but the US card fee is less expensive than the UK card to use in a third country.

That's good to know, thanks.

My American friend recently applied for the Chase Sapphire whilst in Poland and hit the minimum spend to get the 60,000 points. He said he hasn't had any issues using it in Poland. There are no international transaction fees as you mentioned, although he said the exchange rate seemed to be the same as the going rate. Perhaps I'll read the fine print for that bit! If we can get a few bonuses and then earn enough points to visit her family every few years (which we will be doing regardless), then that would be a great way to reduce our average spending.

I could see that working out if you or your wife have US income to pay the credit card with. You mentioned your wife will be working online, so maybe that's the case? I'm paid in the UK and haven't kept much cash savings in the US, so it wouldn't work for me to do a lot of spending on a US card. I ended up using my US card a lot one time in Japan because my UK card wouldn't believe it was really me and froze itself. In that case, I had to transfer money from my UK account to my US one to pay the card and replenish the US cash, so I lost money on the currency exchange from Japan to the US and from the UK to the US. Plus I had to pay a fee to send the money via Transferwise. It wasn't too much trouble, and I was glad I had the back-up card. At the same time, I wouldn't want to put myself in that position on purpose, and I like to keep things as simple as possible.

[SpreadsheetMan]

I had a stab at this "UK investment order" thing myself. In fact it was going to a larger project that I haven't really managed to get off the ground yet. Anyway, I came up with this:


**********************

Do you have any money left over at the end of each month after meeting your everyday living costs?   
Y   Proceed to next step
N   Reduce your living costs and/or increase your take-home income by all means necessary. Do not proceed any further until you have met this.
      
SNIP

Do you still have spare cash to Invest?   
Y   Send it to me in cash in an unmarked brown evelope
N   Congrats, you've invested as much as you are able to currently in the most tax efficient manner

That's a pretty great set of instructions Vand! Thanks. You should continue your project, I'm sure it would be of use to many.

I'm not working right now, but I'll be back to check your list when I'm working again.

In fact, here's a very general question for everyone. My wife will be working online when her UK visa (pain in the arse) is sorted. I'm a teacher, so can pretty much work anywhere. We don't plan to stay in our current location; does anyone have a favourite LCOL area?

I am leaning towards the Newcastle area as I have some family there, I lived there for a short time and enjoyed it, beach, countryside, friendly locals and fairly LCOL, housing etc.

You can’t really go wrong with Newcastle - I went to uni there and grew up in south co Durham. There is plenty of affordable property up there and quality of life is good if you don’t mind the colder weather compared to the south.

I’ve gone soft these days after living my adult life in the south, but I’d still recommend Newcastle to anyone.

[Manchester]

I had a stab at this "UK investment order" thing myself. In fact it was going to a larger project that I haven't really managed to get off the ground yet. Anyway, I came up with this:


**********************

Do you have any money left over at the end of each month after meeting your everyday living costs?   
Y   Proceed to next step
N   Reduce your living costs and/or increase your take-home income by all means necessary. Do not proceed any further until you have met this.
      

This is good advice, but the first question should be modified. 

There's thousands of people in the UK who are on large salaries who spend recklessly.  It shouldn't be a question saying 'do you have money left over at the end of each month', it should be 'have you reduced your spending to a sensible level and attempted to increase your take-home income by all means necessary?'.

Sorry if I'm being pedantic. :')