Changing money and sending it abroad from Britain: where the cost hides and what to check

Currency exchange is a field where the advertising is almost honest and almost useless. "Zero commission" and "best rate" sit in the same window, and both can be true right up until you compare the outcome with the interbank rate. Here is where the money actually goes, how to work it out, and what to check before handing over cash.

The rule that matters: the fee is not the biggest cost

Every exchange has two parts: the commission they name, and the spread — the gap between the rate you are given and the real interbank rate. The second is usually larger than the first, and nobody displays it.

Work it out like this: take the interbank rate (Google, XE and Reuters all show it — that is the "real" one), multiply by your amount, and compare with what you would actually receive. The difference is the full cost of the exchange, whatever the advertising called it.

A useful rule of thumb: the closer to the plane, the worse the rate. An airport is the most expensive place to change money in the country, and that is not an accident but a business model — you are paying for the absence of alternatives.

Cash: where to change it in Britain

• Bureaux on tourist streets — rates vary sharply from one to the next, sometimes on adjacent corners. Always ask how much you will receive, not what the board says: the commission is often a separate line.
• Ordering online for branch collection usually beats walking in — the rate is fixed in advance and visible before you pay.
• A bank is reliable and slow; rarely the best rate, but no surprises.
• Withdrawing cash abroad by card often beats carrying pounds out of Britain — but only if your card charges nothing for conversion and the ATM is not allowed to "bill you in pounds".

On that last point: when an ATM or terminal offers to charge you in pounds rather than the local currency, that is dynamic currency conversion. The rate is then set not by your bank but by whoever owns the terminal, and it is almost always worse. The right answer is always to choose the local currency.

Transfers abroad: how to compare

The comparison takes two minutes and rests on three numbers: the rate you are offered, the fixed fee, and the delivery time. A service with no fee and a poor rate is nearly always dearer than one with an honest fee at the interbank rate.

Worth knowing about speed: "instant" and "same day" are sold at a premium. If the money is not needed today, the ordinary tariff at one or two working days saves a visible share.

And check the amount that arrives, not the amount you send. Some routes add a receiving-bank fee, and the total differs from what you saw at the sending screen.

What to check before you transfer

This is the most important part, and the most commonly skipped.

The firm must be on the FCA register. Check the Financial Services Register by name. Careful: many firms trade under a brand different from their registered name, so you may need to find the company behind the sign.

Non-bank providers carry no FSCS protection. The regulator puts it plainly: if your non-bank payment provider goes out of business, your money will not be protected by the Financial Services Compensation Scheme. That protection applies only to bank and building society accounts.

Safeguarding takes its place. E-money and payment institutions must either hold client money in a separate safeguarding account at a bank, or cover it with insurance or a comparable guarantee. In an insolvency, the FCA's own guidance says you "should get most of your money back" — but it may take time and may not be the full amount.

A note on small payment institutions (SPIs): they have no safeguarding requirement at all. If a firm is registered in that category, ask directly what protects your money.

Russia and Belarus: the honest answer

This needs saying plainly. The UK applies financial sanctions to Russia, and the ordinary payment routes to those destinations are closed at the major providers. Wise closed accounts with Russian addresses back in May 2022 and has not served the destination since; banks and fintechs have withdrawn from these transfers for both sanctions and internal risk reasons.

In practice: a transfer to a bank on the sanctions list is prohibited, and responsibility for a breach lies with the sender. Before sending anything, the current list has to be read on the UK's official sanctions register — it changes, and yesterday's word from an acquaintance is not good enough.

We do not and will not give advice on getting around those rules. We will flag the risk that applies to everyone: private "money movers" and exchangers advertising in chat groups mean your money in a stranger's hands with no guarantee whatsoever. Money transmission in Britain is a regulated activity. An unregistered person accepting money to pass on to a third party is backed by nothing — no FSCS, no safeguarding, and no realistic route through the courts if they vanish.

Where transfers work normally

For most destinations that matter to our readers, everything works and costs little: the EU and the euro area, Kazakhstan, Georgia, Armenia, Moldova, Ukraine and Turkey. The ordinary three-number comparison above applies, and the route stays entirely lawful and transparent.

The short checklist

1. Look up the interbank rate and work out what you will actually receive — before, not after.
2. Never accept being charged in pounds while abroad.
3. Check the firm on the FCA register, including the real company name behind the brand.
4. Remember there is no FSCS for a non-bank service, and ask whether safeguarding applies.
5. Do not change money at the airport if you can avoid it.
6. For Russia and Belarus, check the official sanctions list rather than advice in a chat group.