Sending money internationally is common, but costs can vary widely. In 2023, UK residents sent roughly £9.3 billion overseas. On average, this costs about 6% of the transfer amount – well above the G20/UN target of 3%. World Bank data show the global average fee was around 6.6% in mid-2024, while UK-specific studies report similarly high costs. Over the past few years, remittance fees have fallen (for example, the average fee for a £148 transfer dropped from 7.16% in 2019 to 5.89% in 2024 ), but savvy customers can often pay far less than the average by choosing the right method. This article looks at key factors that drive costs and how to minimise them when transferring money from the UK.
Banks versus online providers
Traditional high-street banks tend to be the most expensive option for international transfers. They often charge a flat transaction fee plus a hidden exchange-rate markup of 2–4% or more. In fact, our previous guide notes that using your bank usually “turns out to be the most expensive option” due to both upfront fees and unfavourable currency rates. A recent analysis estimated UK banks embed roughly a 3% currency spread on large transfers – on a £100,000 transfer, that means £3,000 lost in hidden cost.
By contrast, specialist foreign‑exchange brokers and online platforms typically offer near-market rates with far lower markups (often around 0.1–0.6% above the interbank rate). For example, cutting a bank’s 3% spread to 0.5% on a £1 million transfer would save over £25,000. In short, comparing the real exchange rate matters: tools and comparison sites can reveal the live mid‑market rate versus what you’re actually offered.
Understanding exchange rate markups
Every transfer has an implicit cost in the currency exchange rate. Banks and some services present a quote that looks competitive but includes a hidden margin. Always check the quoted rate against a mid-market rate (e.g. via Google Finance) to see the spread. For instance, a 2–4% FX spread on a £500,000 transfer equates to £10–20k of unnecessary cost. By using a provider whose spread is only 0.2–0.6%, that same transfer would cost just £1–3k – saving tens of thousands.
Many online providers (including platforms like CurrencyTransfer) explicitly show the live interbank rate for this reason. When shopping around, always compare the total fee and rate. Some banks may waive a visible fee but recoup it in a poor rate, whereas transparent brokers charge one low fee and no markup. This is why CurrencyTransfer emphasises full price transparency: it displays the mid‑market rate alongside your quoted rate so you can calculate the true cost yourself.
Payment methods and alternatives
The way you fund and pay out a transfer can also affect cost. World Bank data suggests using a debit or credit card (depending on provider) can be the cheapest way to originate a remittance, though fees vary by service. However, UK banks generally treat overseas card payments as cash advances, which are expensive. Similarly, cash-based methods (e.g. money picked up at agent locations) are very costly. Migration Observatory figures show cash transfers cost about 9.6% on average, nearly double the cost of a bank-to-bank transfer.
In practice, sending money directly between bank accounts (SWIFT, CHAPS etc.) is often cheaper than depositing cash. Mobile wallets and digital cash apps are another option, but be aware many of these (e.g. online payment apps) do not have UK Deposit Protection or FSCS guarantees. This means your money could be at risk if the provider fails. For low-cost transfers, it’s safest to use FCA-regulated services that move funds between bona fide bank accounts. In short, avoid paying in cash or forcing transfers through consumer credit if you want the lowest fees and full protection.
Online money transfer services
Digital money transfer companies have revolutionised remittances. They avoid the overheads of bank branches and often pass savings to customers in the form of better rates. According to CurrencyTransfer’s research, “international money transfer providers usually offer lower transaction fees and more competitive foreign exchange rates than banks”. In many corridors you can now send money for just a small percentage or even for a fixed nominal fee. Some fintech platforms charge as little as 0.1–0.5% on top of mid-market rate , plus a small transfer fee (often under £10). Others operate on a peer-to-peer model, matching people who need opposite currency flows, which can drive fees even lower.
UK-specific data backs this up. A recent study found that for a typical £148 remittance, bank transfers averaged about 4.6% fees, whereas cash transfers were around 9.0%. (That same analysis noted the average has been steadily falling since 2019 as digital services expanded.) In some corridors to countries like Pakistan or India, bank-to-bank transfers can cost well below 1% when done with the right provider. By comparison, sending equivalent amounts via cash or cheque remains quite expensive (often 6–10%). The key is to use a dedicated FX platform or broker rather than your high-street bank. These platforms typically let you lock in an exact rate, set alerts, and hold funds in multiple currencies, which is a huge advantage if you transfer money regularly.
Tips for the lowest cost
To get the cheapest transfer in 2026, follow these steps:
Shop around for the best rate
Use comparison tools or platforms that show live quotes. Remember that even a small difference in the exchange rate can add up. For example, on a half-million-pound transfer, a 3% spread costs £15,000, whereas a 0.3% spread costs only £1,500.
Compare all fees upfront
Some providers charge a flat fee plus a percentage of the amount; others charge only one or the other. Calculate the total (transfer fee + FX margin). A provider with no “fee” but a worse rate may still cost more.
Consider transfer speed vs cost
Faster payment routes (like real-time services) sometimes cost a bit more. Decide if you can wait a day or two for the full savings of a slower method. (Many online specialists deliver within 1–2 business days with little extra charge.)
Use forward contracts or rate alerts
If your transfer is large or can wait, use forward contracts to lock a favourable rate for the future, or set an alert to send when the market moves. These tools are widely offered by FX brokers. CurrencyTransfer’s platform, for example, offers rate alerts and lets businesses lock in forward rates up to 12 months ahead. This hedges against adverse swings and can save money if the pound strengthens.
Consider multi-currency accounts
Holding a balance in the destination currency or a multi-currency account (like those offered by some digital banks) lets you convert when rates are good. For example, if you regularly pay contractors in euros, keep some euros on hand and top up in bulk. CurrencyTransfer suggests that when dealing with frequent payments you open foreign currency accounts or net transfers between accounts to avoid repeated small trades. This avoids multiple fixed fees and poorer rates on each small transfer.
Avoid “cash” methods
If possible, fund your transfer from a UK bank account and pay out to a bank account overseas. Pickup/hand-delivery services or paying by credit card tend to be much more expensive.
Use FCA-regulated providers
Cheaper services should still be safe. Make sure any platform you use is authorised in the UK. Regulated money transfer companies keep your funds in segregated accounts and are subject to oversight. (Note that unregulated “e-wallets” or peer-to-peer schemes may not have these protections.) Sticking to licensed providers ensures your money is protected under UK law while you chase the lowest price.
The best way to send money from the UK
Overall, the cheapest way to send money from the UK in 2026 will almost always be via a reputable online foreign-exchange service or broker rather than a traditional bank. By checking real exchange rates, comparing all fees, and using modern tools like rate alerts or multi-currency wallets, many people now pay only a fraction of a percent on transfers instead of several percent. In short, do your research: as our guides emphasise, those who switch from banks to specialist platforms can avoid hefty hidden markups and secure the best deal on their international payments.
If you’re looking for an efficient solution to transfer currencies into various countries, take a look at our platform: CurrencyTransfer offers access to a network of payment providers, live quotes and 5-star customer service. Sign-up today.
Caleb Hinton
Caleb is a writer specialising in financial copy. He has a background in copywriting, banking, digital wallets, and SEO – and enjoys writing in his spare time too, as well as language learning, chess and investing.
