When planning a trip to London, you must think about how and where to exchange currency to buy British Pounds if you travel from abroad.
When exchanging currency, we face commission fees, transaction fees, not-so-good exchange rates and sometimes other fixed fees. This never works in our favour as we end up paying a significant amount in fees.
Rather than exchanging cash nowadays, we recommend using a Payment Travel Card, but we understand that in some cases, we still need to exchange currency.
This article will summarise the most recommended and profitable options to exchange currency to buy British Pounds before you travel to London. We will also list some of the best places to exchange money in London, in case you need to consider this option.
British Pound Sterling: United Kingdom´s official currency
The official currency of the United Kingdom is the Pound Sterling. One pound is equivalent to 100 pence. There are £5, £10, £20, and £50 notes, and 1p, 2p, 5p, 10p, 20p, 25p, 50p, £1 and £2 coins.
During March and April 2023, the average exchange rate was 1 Euro = 0.87 British Pounds and 1 USD = 0.81 British Pounds. (Source: Oanda.com).
Factors to consider when buying British Pounds
There are two key factors we need to consider when exchanging currency:
- The exchange rate refers to the number of pounds you will get for each euro, American dollar or other home currency. During the day, exchange rates between different currencies fluctuate. If you are travelling to the UK, it’s a good idea to check the exchange rate daily to plan when to exchange your money so you get more pounds for your money. Check the current exchange rate here: https://www.xe.com/
- Commission: Banks and other currency exchange entities usually charge a commission on any currency exchange. This can be a fixed amount, a percentage of the total amount you need to exchange, or both.
Buying British Pounds in London
There are certain areas of London where there are a large number of exchange houses, also called Bureau de Change. If you go to the Tottenham Court side of Oxford Street in London or walk around London´s main train stations, such as Paddington, Victoria, and Liverpool Street, you will see loads. As there are so many, they compete with each other, so it´s easy to check their exchange rates as you walk past and choose the best one.
Therefore, exchanging currency and buying British Pounds in London may be one of the most profitable options from an economic point of view, as exchange offices in central London compete to offer the best deals.
One thing to remember is that paying a UK bureau for currency using a credit card is usually treated as a cash withdrawal. This means your bank will most likely charge you a transaction fee and have interest added. For this reason, it may be best to use a debit card (check your bank’s T&Cs for any fees) or cash to buy currency.
Exchange Houses in London
Thomas Exchange and Covent Garden FX are two of the best exchange offices that I´m aware of in London. They are known for offering the best exchange rates if you visit them in person. But you can get even better exchange rates from these offices when you pre-book currency exchange online through their website (Buy Back option on their website menu). In most cases, this needs to be done on the same day you are planning to collect the money, and you will usually receive more pounds for your money than if you went directly to the establishment. This is a good trick, right?
The website Travelmoney will also help you compare exchange rates.
Exchange Houses in London: Directions and Opening Hours
A few exchange houses in London:
|Covent Garden FX||30 Jubilee Market Hall, Henrietta St, London WC2E 8BE, UK||Monday to Friday 10:00 – 17:30; Saturdays 10:00 – 16:00|
|Thomas Exchange Global||5 Market Place, London, W1W 8AE||Monday to Friday 09:00 – 18:00; Saturdays, Sundays and Bank Holidays 10:00 – 17:00|
|Change Group||35 Charing Cross Rd, London WC2H 0AT, UK||Monday to Sunday 11:00 – 19:00|
|Moneycorp||78 Shaftesbury Ave, London W1D 6NE, UK||Saturday and Monday 08:30 – 22.30; Sunday 09:30 – 22:00|
Buying Pounds at your regular bank
If you wish to buy British Pounds at your regular before you travel to the UK, check their exchange rates first and make sure you understand what fees they will charge you.
In our experience, the average cost of exchanging currency in some European Banks (when we used to live abroad and needed to buy Pounds) would have cost us around 40 Euros more than exchanging once in London.
Banks usually charge a commission, which can be a fixed amount or a percentage of the total currency exchanged, or their exchange rate benefits them rather than the customer. They may apply a management fee which may not be clearly explained.
Currency Exchange at the Airport
Not an option I would recommend. Options to exchange currency at the airport are very limited, so you don’t have much choice, and they usually offer the worst rates possible as well as high commission fees.
If there is no other option, then I would try to pre-order via their website and choose to collect, rather than walking up to the currency exchange office directly. This way, you will likely get a better exchange rate.
Exchanging large amounts of foreign currency
If you need to exchange a large amount of currency, maybe because you are planning to move to the UK or you are going to spend some time here, then you don’t want to pay high fees or poor exchange rates. We found ourselves in this situation when we first moved to London.
The best option is to bring some cash, so you have enough for the first few weeks whilst you organise everything. Opening a Transferwise account or a Revolut account in these cases is probably one of the best ways to get started, as multi-currency cards will allow you to use your card when you’re in the UK. You will most likely need to open a bank account in the UK once you have your UK address, and then Transferwise offers easy international bank transfers without high fees.
Using credit and debit cards when visiting London
Using your regular card
If you live in the UK and have a UK bank account, you can use your regular debit or credit card in London as you would at home. We hardly use cash in London nowadays, and pay for everything using a contactless card, however small the amount.
You can use contactless payment methods at London’s Public Transport, shops, restaurants and even market stalls.
If you live abroad, you can still use your debit or credit cards when visiting London, but the most likely thing is that your bank will charge you transaction fees, commission fees and offer poor exchange rates. Check with your bank first, as this may be the most expensive option. With most debit cards, you pay a transaction fee for spending, typically around 3% of the transaction. There will also be a charge if you withdraw cash abroad. Some cards also charge you a spending fee each time you use your card.
If this is the case, we highly recommend you open a free Revolut account with a multi-currency card that can be used in London.
Revolut Account and Multi-Currency Travel Cards
A travel credit or debit card is almost always the cheapest way to pay overseas, beating bureau de change rates. Real-time foreign exchange, no commission or transaction fees, and no carrying around a bunch of notes that can get lost/stolen.
Revolut is one of the best-known bank accounts that allow you to spend abroad like a local. It is our favourite payment travel card, and what we use if we travel abroad. If you are visiting London and want to use a card, rather than carry a load of cash, we highly recommend Revolut.
- This information does not constitute financial advice. Do your own research to ensure it’s right for your specific circumstances.
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