The Hidden Financial Woes of International Students Heading for the UK
By Peter Miles of UniZest
The decision to move abroad, away from family and friends, in order to embark on University studies isn’t one to be taken lightly and there is no doubt that it presents a number of challenges. Unfortunately, it seems that for students arriving in the UK, managing their finances once they get here sits high on their list of fears. In fact, a UCAS survey reported that 62.5% of international students cited finances as one of their main worries when considering studying abroad.
The Classic Problem
In the majority of cases, international students make arrangements with banks and other providers to ensure that their finances will be appropriately handled for the duration of their study. These measures are supposed to deliver trouble-free foreign exchange (FX) services, and tend to present themselves as ‘virtually cost-free’.
However, the fine-print terms and conditions of these arrangements leave many young people with significant and unexpected fees. Learning how to effectively budget in a new country is challenging enough without having to worry about high banking fees, which in many case, could be avoided. Sadly, the fact is that most students don’t have the knowledge and understanding to determine when they are being left short-changed. Many just assume it is the norm.
Recent research by international studente-banking provider UniZest revealed that in some cases, students could save as much as £500 a year simply by reviewing their foreign exchange solution. It also revealed that the high street may not be the best place for international students to seek out the most cost effective UK banking solution.
New opportunities in e-banking could benefit international students
Recent changes in the financial regulations marketplace mean that the opportunity has arisen for new providers to enter the marketplace, providing online-only bank accounts which provide students with all the functionality that a high street bank can deliver, but with many more benefits.
The Aspire Account by UniZest is one such solution, which launched this month and is expected to receive several thousand applications by the end of 2016. The Aspire Account provides students with a UK e-Current online account, Visa Debit card and transaction-free integrated foreign exchange services with spread rates around 50% lower than most banks and other companies. By partnering with leading financial service providers Global Currency Exchange Network (GCEN) and The Contis Group, a simple and secure format has been built, from which all payments and charges can be clearly monitored.
The participation of The Contis Group and GCEN means that all financial regulations – including Anti-Money Laundering (AML) and Know Your Customer (KYC) – are met, and full security can be guaranteed. The Contis Group is the holder of any funds deposited into the account, all of whose activity is authorised and regulated by the Financial Conduct Authority (FCA).
As well as providing this transparency, the account is considerably cheaper to maintain than those of traditional banks and money transfer companies.
The Aspire Account costs just £3 per month to maintain, and £2.50 to eventually close and transfer funds out of. By slashing the interest rates and staying above-board with additional fees, it is likely to become the most efficient and informative financial solution available for international students.
Retaining Vital Talent in the UK
The international talent pool is highly valuable to the UK economy and therefore it is imperative that they are well supported during their studies – this includes helping them to better manage their finances. Last year, PwC and London First published a study which reported that international students contribute £2.8 billion to the UK’s economy annually, with a further £26 million in National Insurance and Tax contributions after graduation. Through solutions such as the new Aspire Account, students can look forward to a brighter future in which they have far more control over their money and a clearer understanding of their own finances.