Moving to the UK (Pt 2): Healthcare and Finances

“So what do you think of nationalized healthcare?”

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Admittedly, this question could be asked on both sides of the Atlantic, but with obviously different overtones. We’ve been asked several times what it is like to live in a country where national healthcare is fully implemented and has been for decades. The jury is still out for us, since we have not been here long enough to visit the doctor all that much (…and I just jinxed us…).

However, before moving here healthcare was one of the biggest unknowns for us. We literally had no idea really how it would work or whether and under what circumstances we would be covered. So hopefully this post will help clear some of that up.

In addition, I’ll address one of the other major issues with moving overseas: finances.

This post is the second in a four-part series on moving to the United Kingdom, with a particular focus on moving a family as a Tier 4 student:

  1. Visas and Immigration
  2. Academic Planning
  3. Healthcare (this post)
  4. Financials (this post)
  5. Moving
  6. Travel
  7. Finding a place to live
  8. Setting up your new life

Let’s dive into the healthcare question first.

(3) Healthcare: Medical Care for Your Family as an Expatriate

This is obviously at the top of everyone’s mind, especially if you are coming from the U.S. where the implementation of the Affordable Care Act is off and running. We knew, of course, that the UK operated a nationalized plan called the National Health Service, but healthcare was one of the areas in our transition planning where we felt like we had the least clear and/or most contradictory information. In fact, we were not really sure we were quote-unquote “covered” until we had our first visit to the doctor and walked out without paying…and did not receive a visit from a collections officer. For whatever reason, the NHS website can be unclear (often to UK nationals as well), and the university-provided resources are delightfully vague. Apart from telling international students to make sure they are covered, they (and by “they” I can only speak of Cambridge) provided no clear guidance, which I can only assume is a result of avoiding any legal problems if folks do something wrong based on their advice.

Here is the scoop based largely on the herculean efforts done by my wife to sort it all out via contacting other expatriates and filling about numerous forms when we arrived. If there are any errors below, they are mine, not hers.

Will we be covered under NHS? What does it cover?

  • The short answer is “yes,” assuming you have the right visa clearance. Tier 4 students are fully covered under the national health plan (see prior post about Tier 4 status).
  • NHS will cover the basic health care costs for your entire family, regardless of preexisting conditions, for regular checkups, illnesses, medical emergencies, even child birth. I would not want to go so far as to say you would be 100% covered for extraordinary expenses (chronic care, major surgeries, etc.), as we have not had to deal with those things. But for basic needs, you are covered under NHS as soon as you clear customs (so long as you have a demonstrable right to live here as a resident, e.g., your Tier 4 visa).
  • NHS does not, however, cover many dental expenses or the cost of prescription drugs, unless you are exempted for some reason. It is my understanding that this applies to UK nationals as well.
  • Corollary question: will friends and family who visit me in the UK be covered? Yes and no. Yes, they will receive treatment. No, it will not be free. They will likely be on the hook for some or all of their treatment expenses, depending on what type of care they receive. See the NHS page regarding visitors.
  • Note that the NHS is not the only option. You can purchase supplemental “private” insurance as an add-on to NHS; it may offer you better / quicker access to care, more treatment options, etc.

How do we get set up with NHS? What is the process for treatment?

  • The basic idea behind the NHS is that everything medical is done through the GP (General Practicioner), who is similar to a primary care provider in a lot of U.S. insurance plans (at least, in the old days). The GP is the first person you see for basically everything medical, including your children (there really is no such thing as a general pediatrician here, though there are some specialists who focus on pediatric surgery, etc.).  The GP is the gatekeeper for all normal care (viruses, vaccines, minor injuries, etc.), prescriptions, and all referrals to specialists for imaging, surgery, etc. Dentistry and optometry are separate and operate more like entrepreneurial private practices in the US; notably, you typically end up paying for all of your dentistry (apart from brief checkups) or optometry care, unless you purchase private insurance.
  • Most GPs operate in groups out of what are called “surgeries,” which have nothing to do with the normal American idea of “surgery.” These surgeries are essentially the same as your local doctor’s office. In good-sized cities, you will find a lot of options for surgeries. As with all countries, some surgeries are better than others, some surgeries are busier than others (and, hence, harder to schedule an appointment), and some GPs are better than others.
  • Importantly, you have to register with a GP to have full access to NHS, and this should be done as soon as you possible can upon arrival. When they say “register with a GP,” they do not mean with a single individual doctor, but rather with a surgery where a group of GPs work (in this sense, “GP” can mean “the doctor himself/herself” but can also mean “the surgery where I go”).
  • So here are the basic steps to get registered:
    • Step 1: Search the NHS website for the surgeries/GPs near where you will be living.  This can be done before you arrive: http://www.nhs.uk/Service-Search/GP/LocationSearch/4
    • Step 2: Ask around for recommendations on the best surgeries/GPs: e.g., neighbors, folks you have met over email before your arrive, whomever may know something. The NHS does post some user ratings, but they are not always useful. Here is an example of the information that is available when you search:
Screenshot of NHS ratings of local GPs
Screenshot of NHS ratings of local GPs
    • Step 3: Once you are in the UK, visit a couple surgeries to see which ones seem like the best fit. Ask questions about whether they have openings for new patients, what sort of after-hours support they offer, how many doctors they have, whether they have nurse hotlines or in-home visitation (some do), etc. Standard due diligence.
    • Step 4: Select a surgery/GP and visit the office to register with them. They all operate somewhat differently, but the basic goal is to procure a form that you need to fill out in order to register with the NHS (at the national level) and specify that surgery as your primary GP (which you will need to do on the form). Either you or they will send it off to the NHS, and after some period of time you will receive an “NHS number” that is functionally equivalent to your insurance card in the US. It allows you to schedule appointments and serves as the basis upon which you receive free care.
    • Step 5: Once you have a surgery/GP and an NHS number, you are more or less good to go to follow their instructions for appointments, etc.

What are the biggest differences you’ve noticed? What other things do we need to know?

  • So far we have had a fine experience with NHS care. There has been a rash of bad press in the past year about poor standards of care, disaster scenarios for patients, disgruntled doctors, etc., so it’s become a hotter topic of conversation. In general, my read is that the standard of care varies based on where you are living, which is no different than in the U.S. or anywhere else. In the tier 1 cities (London, Birmingham, Manchester, Liverpool, Leeds, Bristol, Cambridge, Oxford, etc.), the care will most likely be excellent, but as with anything you’ll have stories of bad doctors or bad patient experiences. From what I understand, the care is much more variable in the rural areas and villages, but that is not necessarily unusual: fewer options, fewer doctors, etc. Historically, the NHS has been a matter of national pride, and most folks will say they are very pleased with it. There’s apparently a growing movement among the younger crowd to question the system, but again that’s not surprising. I’ll put it this way: so far we’ve not met any expatriates who have had anything negative to say about their experiences, and some have had multiple babies, major accidents, surgeries, etc.
The system HAS to be pretty good if they use Mercedes Benz ambulances, right?
The system HAS to be pretty good if they use Mercedes Benz ambulances, right?
  • That said, it is still meaningfully different. The NHS operates on a limited pool of money based on tax revenue. Thus, there is a tremendous incentive as a nation to manage costs, because they literally have a limited amount to spend. Hence, we have found that people do not go to the doctor unless they really need it, and they take control of their own health more than we’re used to. Part of that is probably the demographics of Cambridge, but part of that is the realization that if they show up at the GP with just a common cold, they will not be given much sympathy let alone given a Z-pac. We’ve heard mixed stories about how willing a GP may be to order up an expensive CT or MR for a sore elbow (whereas that’d often be the first thing an American doctor would often do); some say they are less willing, and other say they do it all the time. So again, I don’t think there’s a straightforward generalization.
  • Other things to know:
    • The emergency room is call the A&E (Accidents and Emergencies), and it operates much like an ER in the US.
    • The emergency number is 999.
    • Ambulance service is apparently quite good (we haven’t used it yet, thankfully), since many people use public transit versus their own vehicles.
  • The best thing to do is spend time on the NHS website to familiarize yourself with the process, terms, etc. Then when you are totally confused and overwhelmed, talk to someone who lives here!

(4) Finances: Banking, Currency Exchange, and Budgeting

While healthcare stuff occupied much of my wife’s time, I would say that finances were the biggest source of stress for me (apart from the actual task of moving). The single most frustrating thing about banking is that it is a massive catch-22: to secure a bank account, in most cases you must have a permanent residence and official bills (utilities or whatever) … but to sign a lease on an flat/house or to sign up for utilities, in most cases you need a bank account. It ultimately works itself out, but it’s somewhat painful.

Banking

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  • You have basically two options with regard to how you can approach banking.
  • Option 1: Wait until you arrive and secure a checking account within the first few weeks of arriving. There are a ton of banking options, from Barclays, HSBC and Lloyds to smaller banks. To sign up for a checking account, you will most likely need the following: (a) visa information, (b) permanent address details and probably a utility bill or something to demonstrate proof of residence (hence the catch-22); (c) formal signed letter from your university verifying your enrollment status (you’ll need this kind of letter for several things, actually); and (d) money to deposit or wire into the account. I’m sure there are plenty of other things you’ll need, but those are the main ones. The key is to make sure you have originals. Limitations of this approach:
    • From what I have heard (we didn’t go this route, so I don’t have firsthand experience), it can be surprisingly time-consuming to get your account set up. Even if your university sponsors a “sign up for a bank account” type of event (some will), be prepared for it to take several days or weeks.
    • Thus, if you decide to wait, you’ll need to be prepared to use cash or a US card to pay for expenses. This can be pretty expensive, depending on your account setup in the US, as many big bank debit cards charge 3% on international transactions. You don’t want to be pre-paying several months of rent (more on this in a future post) using a Visa card if you can avoid it.
    • The reality is that you’ll be hemorrhaging cash during your first month on the ground, far more than you can ever imagine. So the sooner you are doing it in straight GBP (rather than USD converted at the point of sale to GBP plus some sort of fee), the better.
  • Option 2: Pursue setting up an international bank account with one of the major banks in the UK before you arrive. At least one bank (Barclays) offers a solution for expatriates that allows you to keep multiple checking accounts (e.g., USD, GBP, and EUR) under a single customer account. The best part is that, with some luck, you can get this set up before you arrive, so that you hit the ground running with a checkbook, debit card, etc. We went this route, and while it was infinitely frustrating, it has also worked quite well in the end. Limitations of this approach:
    • Not every bank offers it. It took a TON of research to figure out how it works for Barclays.
    • Prepare to spend a lot of time on the phone calling customer service to work out the details. To that end, purchase some Skype credit and use that to call their landline numbers. The worst part about this was trying to talk to bank folks who were 5 hours ahead, so I was often on the phone with them at 5am my time so that I could wait in the queue for 45 minutes to finally reach someone before they went to lunch.
    • There are several requirements to apply for this account: (a) Proof of residence in the USA. They know you’re moving, of course, but to meet their own bank regulations they have to have demonstrated proof of your current residence in the US. This requires at least two official utility bills and/or an official bank statement showing the address of both account holders that conforms precisely to their standards. If you use e-bills like we did, producing these documents is actually really difficult. After two failed attempts at submitting our documents to Barclays and having them rejected because of this proof of residence issue, I had to (a) ask our natural gas provider to prepare a special paper bill and expedite it to us, and (b) visit two bank branches (the first one didn’t meet Barclays’ standards) to get an official letter stamped by the branch manager … AND Barclays still called the guy to confirm everything! (b) Copies of immigration documents. (c) Proof of sufficient funds in USD at your current bank account and proof of income. These accounts are technically aimed at high net worth individuals, but since as a student who will be soon spending his life savings for tuition, you will likely have enough cash on hand in your account to meet the criteria.
    • Even if you have 100% perfect documentation, it may still take 4-6 weeks for them to jump through all their hoops to get the account approved. It’s totally legitimate, but since it involves international currencies across different accounts and different residential addresses, the regulations are pretty intense.
    • Biggest drawbacks: you will likely owe a monthly service charge of £6-10, and you will have to maintain a minimum balance in your account. Granted, a lot of normal checking accounts charge a monthly fee, so these weren’t a huge deterrent for us, and the benefits easily outweigh the tradeoffs.
    • Given that it takes quite some time to get this all set up with multiple rounds of back and forth, the key is to start early. We didn’t get across the finish line soon enough for them to mail us our cards/checkbook, so we had to pick them up at a branch near our house. But that all went fine, and we were up and running almost immediately.
    • It was tremendously advantageous to have a bank account already set up when for tuition, cell phones, utilities, rent, etc. Getting the account set up was the bane of my existence for about 5 weeks, but it paid off.
  • Other pointers on banking
    • Regardless of how you approach getting a UK bank account, you will be purchasing stuff in pounds using a US card both before and after you arrive. For instance, you may be booking train tickets from the airport, or a hotel room, or stuff from Amazon, or whatever. I learned the hard way that US banks post-Dodd Act are very serious about overseas transactions that look suspicious. The first time I tried to make some purchases on UK websites, I was declined. After calling our bank twice to have them set up a “travel itinerary” on our account to allow these purchases to go through, THEY STILL were declined (even at Amazon.co.uk!). I finally convinced the bank to put our account on the lowest level of fraud protection possible, and that seemed to work whereas these mythical travel itineraries failed (note: they didn’t work for my parents either, but my mother-in-law had no problems; perhaps it depends on the bank). Point: add a task to your list regarding talking to your bank about your travel plans. It’d be a BIG problem if you ended up in the UK with no UK debit card, no cell phone, and have your US debit card be declined and suspended for suspicious activities…while you’re jetlagging…with tired kids…in a new place…and hemorrhaging money… Plan ahead.
    • This may be obvious, but you’ll want to keep at least one US account and one US credit card running.

Currency Transfer

Once you have a bank account in the UK, you have to get money into it via wire transfer or cash deposit. That’s where foreign currency exchange rates come into play in a big way.

When we were developing our budget as part of the application process, the pound was sitting at 1.51 to 1 relative to the dollar. It even dipped to 1.49 that summer. It has since shot up to a multi-year high of 1.65 and has been holding steady. If you do some back-of-the-envelope math on tuition and living costs over the course of your stay in the UK, you’ll realize that a 0.01 change in the FX rate amounts to something like a $1,000-1,200 hit to your budget. Let’s just say that I now have a bookmark on my phone that goes directly to the exchange rate, and I watch it like a hawk.

The reality is, however, that as a private citizen who is not an FX expert or attached to a trading desk with access to huge capital and who, thus, can take advantage of currency swings, there is little you can do to hedge your currency exchange risk. The best bet is to keep some in USD and some in GBP, versus going all in to GBP (unless it’s some sort of massive historical low rate that you can lock in). It stinks, and it can make a huge impact on your financial outlook, but it is out of your hands.

Rather than stressing over currency movements and trying to time the market, I think the best strategy is simply to manage your costs of exchanging. The published rate for GBP-USD (google) reflects the spot or theoretical exchange rate. In reality, your real exchange rate if you are sending a wire transfer to your new account will be meaningfully higher: (a) the institution doing the exchange will typically charge a spread over the market rate (e.g., our bank would usually quote a rate that was 0.04 higher than the market rate; e.g., if the market rate for the day is 1.64, they would charge 1.68. If you’re moving tens of thousands of dollars, that is a huge hit. It was even worse if I let Barclays do the exchange); (b) the sending institution (your US bank) will also charge an outgoing wire transfer fee (sometimes up to $35); and (c) the receiving institution (your UK bank) will charge an incoming wire transfer fee (£6-10). There’s not much you can do to mitigate these costs other than trying to do as few transfers as possible. This benefits you in two ways: you reduce the number of outgoing and incoming transfer fees you incur, and usually you get a better FX rate for larger sums of money.

There are basically two ways to manage wire transfers:

  • Use your US bank to convert the money (probably cheaper than letting the UK bank do it) and send the wire. Every bank offers this service, but sometimes you have to visit specific branches. For almost all banks, international wires have to be initiated in person. This raises, however, an important question: how do I initiate wires from my US bank if I’m the UK (e.g., to replenish your now depleted UK account)? There are two options here, too:
    • Designate a co-signor on your US account who can initiate a wire. You’ll have to do this long before you move, as it will require you both to submit a fair amount of paperwork. However, once it is set up, this other person can do whatever is needed. Make sure you trust them! (Funny side effect: our bank now thinks I live with both my wife and another guy who is an elder at our former church. Awkward).
    • Work with your bank to set up the option to initiate international wires by phone. At least for our bank, this required me to receive a password at my domestic residence and mail back confirmation to them — which was hard to do since we had already moved!
  • Use a currency exchange brokerage. There are several of these online that offer cheaper exchange rates, some of which come pretty close to matching the market rate. Most of them operate in a three-stage formate: you transfer money to them from your US account; they conduct the exchange; then you transfer from them to your UK account. This presents an interesting conundrum: how much do you trust these guys? If you do enough research, you will probably get comfortable with one of them based on legitimate reviews that are out there. We picked one and then did a small test run with a few hundred dollars to make sure the process worked as billed, and went from there.

Bottom line: the whole currency exchange thing is pretty stressful at first, and then you realize that you just have to roll with it.

Budgeting

The most important guidance I can provide on budgeting is to assume you will spend 50% more than your most conservative estimate in the first 6 months. From the time you land, you will bleed cash at very high rate. Things will pop up that you never anticipated. It does eventually get better, but for your own sanity I encourage you to assume the worse and be pleasantly surprised, rather than budget down to the penny and get mad every time you go over your budget.

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Be prepared for this feeling

The best way to set a basic living expense budget is to start looking at the relevant websites to get a sense for what things will cost; using a simple CPI scalar will not really work. For instance, check out cell plans at Vodafone or O2; look at a few broadband providers (Virgin Media, BT) to see what their plans are like; look at the power and gas provider for your area to see if they have any information; etc. We’ve found that groceries are cheaper here than in the US, but eating out is usually more expensive since you don’t really have quick-casual or fast food options here apart from a few McD’s and KFC’s around. I will touch on cars in a later post, but in a nutshell: used cars are very affordable here; petrol is very expensive, but you also do not drive as far (we fill up less than once a month); annual fees (MOT and Tax, which are akin to state inspections, property tax, and license/registration fees in the US) are actually pretty reasonable; insurance is very expensive for immigrants; repairs are not too bad.

You’ll also want to look into whether your new city has a local tax charged on all homeowners (which can be quite expensive); in many leases, the landlord will require YOU to pay that fee. However, as a full-time graduate student, you will likely be able to apply for exemption.

If you are the Excel budgeting type, I’d suggest the following basic structure for your monthly forecast, which allows you to keep tabs on multiple accounts and FX changes:

  • Section 1: Beginning of Month
    • USD account balance
    • Amount in USD to transfer during the month (if any)
    • Exchange rate (actual when you actually do it; estimate it for future months)
    • Resulting transfer amount in GBP
    • GBP account balance
  • Section 2: USD income and expenses
    • Any inflows to your USD account
    • No doubt you will have some expenses that you’ll still be paying back home, such as life insurance, credit card annual fees, whatever
  • Section 3: GBP income and expenses
    • Any inflows to your GBP account
    • Academic expenses
    • Living expenses
      • Automotive (petrol, repairs, parking, insurance, MOT/tax)
      • Cell / wifi
      • Food (eating out, groceries)
      • Gifts
      • Rent
      • Other home-related (furnishings, etc.)
      • Clothing
      • Entertainment
      • Utilities
      • Miscellaneous
  • Section 4: End of month
    • Ending US balance (beginning minus transfers plus inflows minus expenses)
    • Ending UK balance (beginning plus transfers plus inflows minus expenses)
    • Estimated combined amount (using exchange rate)

Final thoughts: The Lord is sovereign over your money, not you. We are stewards of that which is ultimately not ours. Hence, we should do our best to manage it wisely … but trust that he knows about all the ridiculous nickel-and-diming and FX-rate swings that are about to hit your wallet. Part of the calling to move overseas is to trust him in these matters, as hard as that may be in the trenches.

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