Transferring money from the UK to the Eurozone involves, of course, a currency exchange. However, since the UK is (still) part of the EU, and the SEPA zone, shouldn't the transfers be easier than when transferring from, say, the USA or India?
Transfer through your bank
SEPA only forbids banks from charging extra for SEPA transfers. It doesn't force banks from using mid-market exchange rates. And quite understandably so, given that SEPA is meant to be single-currency. It doesn't concern itself with currency conversion. As a result, banks tasked with transfering money from a Pound Sterling account to a Euro account, will often offer an expensive conversion rate.
In addition to that, our research shows that, in addition to the bad exchange rate, many UK banks also charge a quite expensive fixed rate to perform such transfers, in blatant violation of the SEPA guidelines.
Transfer through a broker
Clearly, an alternative is needed. And, indeed, there are many specialized brokers that will undercut the banks rates by orders of magnitude to make the most of your pounds in the Euro zone.
Currencies Direct, Moneycorp, the Post Office, Hifx and the newer, no-frills operations such as Transferwise all compete for your business. Their offers closely match each other's in terms of fees and exchange rates. We recommend getting a quote from a couple of them to compare.
Fixed fees are easy to compare. Exchange rates, on the other hand, often act as a hidden fee that is very hard to compare. For high amounts, a bad exchange rate is what's going to cost you the most. On 10,000 GBP, a variation of one penny on the exchange rate makes a £100 difference. The problem is that exchange rate evolve by the second. You'd need to get separate quotes from all providers at the same time of the day in order to really compare them.
In the end of the day, you can get a good feeling of how much the transfer will cost you, by assessing how modern the broker is. It's not absolutely foolproof, but a good rule of thumb. If the provider's methods are more automated, they'll save more, and forward some of the savings to you. Through the use of APIs, a lean startup company can squeeze the costs to the lowest denominator, and provide much better rates to their customers than a brick-and-mortar traditional actor with slow paper-based procedures. Be on the lookout for such clues when shopping for international transfer brokers.