The United Kingdom and Ireland's trading relationship remains as one of the most important trading relationships that each country has.

A quick look at the numbers shows UK exports to Ireland in 2018 were worth £35.1 billion, whilst Ireland’s exports to the UK were worth £21.6 billion. Meaning from a British perspective, Ireland is the UK’s 5th largest export market and 10th largest import market. In fact, despite the concerns of Brexit, exports to Ireland were never higher than in 2018 and whilst exports to the UK from Ireland fell slightly in 2018 they were still close to the all-time highs of 2017.

With the sheer amount of money flowing between one country to the other, individuals and businesses alike should be taking stock of how they are sending their money between Ireland and the UK to ensure this is done in the most efficient method possible. Whether it be a focus on cost, speed or the payment method used.

The bank costs - advertised and hidden

Firstly let’s look at the advertised payment fees for international transfers when using a bank.

*Payment fees for individuals according to information currently advertised on their websites, likely to differ for businesses.

At a quick glance, there’s no doubt the Bank of Ireland comes out as the cheapest option of all the main Irish banks. Impressively offering UK transfers for free, just like modern foreign exchange firms who also offer fee-free international payments as standard for private clients. To transfer money from Ireland internationally however outside of the UK would incur a fee with BoI. It’s also worth mentioning that as well as these advertised payment fees there are potential intermediary bank charges when banks send money via SWIFT - it’s impossible to know exactly what these will be for each transaction as these will depend on the intermediary banks involved but they can certainly add up. 

Then, most importantly, comes the foreign exchange spread the bank decides to take on the transfer. It’s impossible to know exactly what spread a bank will take as they don’t usually advertise their rates online so the only way you can know for sure is by calling your bank and then comparing their rate with the mid-market rate found on google when you search terms such as ‘EURGBP’ or ‘Exchange rate euro to pounds’. It’s not uncommon for banks to be taking a spread of anywhere from 2-6% of the value of your transaction when converting funds. So on a transfer of €10,000 this could be between €200-€600. A rate closer to the mid-market rate is more likely to be found with a dedicated international money transfer provider, increasing the amount you receive on the other end.

Foreign exchange firms - what other options are there?

In contrast to banks, there are a number of foreign exchange firms who are happy to advertise the spreads they take. One of the best solutions that can be found with any money transfer provider is WorldFirst who have possibly the cheapest standardized pricing model currently on offer for the UK and Irish residents.

Source: worldfirst.com/uk

Source: worldfirst.com/uk

Now that you can clearly see the fees involved with using a company like WorldFirst why not compare it to the rate you are given by your bank. It would be wrong to completely guarantee the WorldFirst rate will be better but trust our word and put it to the test - there is a reason one is happy to advertise their spread online and the other isn’t! 

Using an example the calculation method would be as follows:

Current mid-market EURGBP rate (23/01/2020): 0.84

Bank Rate: 0.88

0.88 - 0.84 = 0.04 

0.04 / 0.84 x 100 = 0.0476

0.0476 x 100 = 4.76%

In a hypothetical example, the bank is 4.26% more expensive than WorldFirst for annual transfer volumes between £0 - £500,000. Fees that soon start to add up, particularly on transfers of €1000+.

TransferWise are also happy to advertise their rates online and have made it their mission to remove unnecessarily high fees. With TransferWise you get the mid-market rate but still pay a fee for each transfer. They even provide their own indication on rates in comparison to Bank of Ireland. In fact, there are a huge variety of international payment firms that will almost always prove the best way to transfer money from Ireland to UK.

More delivery options for private clients and SMEs

For individuals and small businesses looking to send money abroad, finding a breadth of international payment solutions can be difficult. One-off transfers to be made on the day you request them isn’t always enough. With many international payment firms such as WorldFirst or Moneycorp, who have a dedicated team for individuals based in Ireland, you can find a helpful variety of other tools.

Recurring payments

Agree to make the same regular transfer at dates in the future, for example, weekly or monthly. If you’re one of the 115,000 British ex-pats working in Ireland it can prove a great method to send part of your monthly salary home.

Target rate

Target a certain rate in the market and have a trade automatically execute when it hits that rate. Great to protect downside if the rate worsens or aim for a higher rate should the market move in your favor.

Forward contract

Agree today’s rate for a point up to two years in the future. Hedges against any future market movements and provides clarity on exactly how much you will have to pay. Often used for peace of mind when buying a property abroad.

Dedicated foreign exchange firms bring a variety of solutions that have not typically been available to individuals looking to send money from Ireland internationally. With an increased offering and the chance of improved rates, they must be regarded as the most efficient way to transfer money from Ireland to the UK and vice versa.

How to transfer your money between Ireland and the UK. Getty