If you are new to the U.K. and planning to stay for a while, one of the first things you’ll need to do is open up a bank account. Without a bank account you won't be able to rent a property, set up your utility bills and pay for your mobile phone.
In recent years many people switch from traditional banks to modern challenger banks as they offer a mobile-first banking experience, lower fees and overall a better customer experience. Furthermore, you can create a bank account via your smartphone in a few minutes with the modern challenger banks.
However, it might still make sense to use a traditional bank if you don't trust the new banks with all your savings.
Things to keep in mind
Opening a bank account in the U.K. can be pretty frustrating. Banks are still very traditional and require a lot of documentation from people who are moving from abroad. In order to set up a bank account, you’ll need to
- provide proof of identity (passport)
- proof of address (utility bills).
If you have just moved to the U.K. and still looking for that perfect home, this might be somewhat challenging. With no U.K. credit history or utility bills to prove your reliability, you might not be able to open a bank account. This can be very frustrating considering the fact that you cannot rent a flat without a U.K. bank account but you cannot open a bank about without proof of address. However, modern challenger banks have solved this issue in recent years.
Finding the best deals
In the U.K. MoneySuperMarket and MoneySavingExpert provide you with the latest deals and comparison of bank accounts.
Revolut - FREE
Revolut is the leading challenger bank in Europe with over 12 million customers and over $750 million raised. Their app allows you to exchange money without fees, which is particular useful when you're moving from abroad. Although they're not a bank yet, they allow you to use their accounts like a bank account, earn interest on your savings and buy stock without fees.
Monzo - FREE
Monzo is the leading UK challenger bank with over 3 million customers. Their free current account can be set up in a few minutes online and provides you with everything you need to manage your money. Furthermore, Monzo allows you to create a joint account that's extremely useful for couples. Compared to Revolut, Monzo is probably the better bank account however falls short on the currency conversion and other features of Revolut.
Starling - FREE
Starling Bank is another UK challenger bank that has been voted the best current account in 2020. They're similar to Monzo in their product offering.
Other challenger banks:
These are the most popular traditional bank accounts: