Are you thinking of moving to France from UK? I’m sure you have already considered why you want to move and what some of the potential pitfalls may be. However, have you fully understood all of the financial changes ahead?
This moving to France from UK article forms part of a series of articles, all written by personal friends of moneystepper who have actually moved from the UK to the specific country in question. This will give you first-hand experience of certain financial benefits and money mistakes to avoid when moving abroad.
Because the articles are written by these people, the advice will include the less obvious benefits and mistakes that you may not usually find through a google search. Instead, they will be the real-life things which you generally don’t encounter until they actually impact you.
Right, I’ll start us off looking at moving to France from UK. As regular moneystepper readers will know, my fiancée and I moved to France from UK in October 2012, from Newcastle to Marseille. Before we start looking at the benefits and mistakes to avoid, here are 10 photos of Marseille for you to enjoy:
If you like the look of these photos of Marseille for a holiday, you’ll find many more in our guide of 10 free things to do in Marseille.
Moving To France From UK – Benefit 1: There Is Such A Thing As A Free Lunch!!
This was the first pleasant financial surprise we came across. French employers are obliged by law to provide lunch to their employees. This could be a subsidized cafeteria on the premises? Personally for us, and for many French employees, our lunch comes in the form of a “ticket restaurant”. This is a voucher which you can redeem pretty much anywhere that sells food (cafés, restaurants, supermarkets, sandwich shops, etc…).
In 2014, the value of the ticket restaurant was €7.60 per day. Half of this comes out of your paycheck before tax. The other half is paid for by your employer.
Assuming, for ease, an income tax rate of 20%, you only pay the equivalent of €3.16 for your ticket restaurant, and hence €4.44 free each day.
With 251 working days in 2014, that equates to an additional €1114.44 on top of your basic salary (around £900 at current exchange rates).
This is essentially free money as you can still take a pack up to work if you wish (although note that your colleagues will actually think you are clinically insane and you’ll have to spend 2 years convincing them that a “packed lunch” is fairly normal in the UK) and then spend your tickets in the supermarket on your weekly shop.
Moving To France From UK – Benefit 2: – Employers Pay 50% Of Your Transport Costs
They are nice these French employers aren’t they?
Under Article L.3261-2 of the French Labour Code, employers are required to cover 50% of the cost of travel on public transportation systems between their habitual residence and place of work, regardless of where they may live.
In Marseille, public transport is very reasonably priced anyway. Our monthly pass (I would say an equivalent of a zone 4 travel card in London) is €44.80 per month. This includes trams, subways, inner city buses and even some buses to nearby towns (within 5-6 miles).
After our employer contribution, we only pay €22.40. Based on current exchange rates, this is around £18.50 per month. The equivalent for a zone 4 travel card in London – £172.80 per month!!
This leads to a saving of around £1,851 per year on travel within the city.
Moving To France From UK – Benefit 3: Working Hours (Holidays, Bank Holidays & RTT)
If there is a stereotype that the French are lazy, it is probably due to this!
Let’s start with the statutory legal minimum holiday days. Under French employment law, you are legally entitled to 25 days holiday. The equivalent in the UK is 20 (well, its 28 but that includes the 8 bank holidays). Many UK employers do offer 25 days holiday, but this is not a legal requirement.
Then, there are additional bank holidays. These work slightly differently than the UK for two reasons.
Firstly, bank holidays are taken on the day which they fall (rather than being the nearest Monday in the UK). Therefore, in France, if the bank holiday falls on a Saturday or Sunday, you lose it! This sounds bad, but it isn’t really. The difference is that there are 11 bank holidays in France, compared to only 8 days in the UK. The maximum number of holidays which fall on a weekend is 3. Hence, in most years you will get 10 days bank holidays, often 9 days and very occasionally only 8 days. Therefore, on average, you probably get one day more in France.
Secondly, there is “la pont”. In France, it is standard practice to “faire la pont” – make the bridge. When bank holidays fall on a Thursday or Tuesday, the majority of workers also take the Friday or Monday off to make it a 4-day weekend. Some employers (albeit less than in the past) offer this day as a free day’s holiday.
Finally, we have “RTT” – Réduction de temps de travail. In the past, a law was passed which changed the standard working week from 37.5 hours to 35 hours per week. However, most employers still have a standard working week for 37.5 hours. To get over this, they introduced a system whereby you can take a certain number of days RTT per year effectively as additional holiday. The number of days you are entitled to will depend on your contracted/worked hours. We current get 10 days a year for a contractual 40 hours per week). You will be entitled to even more RTT (up to a maximum of 4 weeks) if you are contracted longer hours.
Therefore, you may be entitled to up to 25 days standard, 20 days RTT and 10 bank holidays – you’ll barely be at work!!
Oh, there’s more. Depending on your employer, you will also be entitled to other days off – you get days off if you get married or even if you move home!! Oh, and if you have been employed for 3 years, you are legally permitted to take a year sabbatical (unpaid leave), but retain the rights to return to your previous position after a year off!
Moving To France From UK – Benefit 4: Cheap, But Very Good, Wine
I couldn’t overlook this, could I? I’ll demonstrate via two stories – both short, but they make my point.
Firstly, we recently bought a bottle of champagne from the supermarket in France for when we came back to the UK to visit friends for €27 (around £22 in the UK). 8 hours later when we landed in the UK, we quickly popped to Tesco for other supplies and saw the very same bottle in Tesco for £34.
Secondly, on our last vineyard tour earlier this summer, we went to one lovely vineyard in Provence where you could bring in your own plastic container and fill it up with wine from the tap. We tasted some, just out of curiosity, and it wasn’t half bad. It cost €1.10 per litre, which is equal to €0.77 a bottle, or 62p!
I repeat: 62p for drinkable red wine! “Nuff said”.
However, watch out for beer. If you go to a bar in the center of the city, or by the coast, you could find yourself paying €5 for 250ml (less than ½ pint). The solution: just drink wine!!
Moving To France From UK – Benefit 5: The Weather
I’m sure you know that the weather in the South of France is a little more pleasant than in England. However, you may be asking yourself why this is a financial benefit.
Well, I recently wrote an article outlining 10 free things to do in Marseille. Well 10/10 of them are either only possible, or much better, with good weather. And, as the title suggests, they are all free!
Often, bad weather drives us indoors to find activities in sports centers, shopping centers or bowling alleys! With the better weather, none of this is necessary. Everything is better, and cheaper, in the sun!!
Moving To France From UK – Mistake 1: Not Saving For Your Taxes
Income taxes vary greatly in all countries, and hence the fact that it is different should not be a surprise. We were expecting different rates, but were surprised by the difference in how it is paid in France.
In the UK, it was easy. Everything (income taxes, national insurance, etc) was taken off our gross salary through PAYE. The tax year runs from April to April.
In France, our social security is deducted at source. However, our income tax is payable for the calendar year and is payable 9 months after the end of the calendar year.
Therefore, we have to save up a portion of our income to ensure that we can meet our tax payment in the following year.
This is a good thing as you get up to 9-21 months to pay your tax liability after it is incurred. This additional cash flow can then be invested in the meantime before you pay it off. However, you MUST make sure you keep the money safe to pay your tax liability the following year or the penalties are pretty severe!
If you are planning to buy French property, shares or other physical investments, the rules surrounding capital gains tax are also different.
Moving To France From UK – Mistake 2: Hidden Local Taxes
And it is not just income tax. Again, in the UK, our only other tax was council tax which was agreed and paid up front with the council for the year. Not the case in France.
After 16 months of living here, we have just received three tax bills in the last few weeks which we had no idea about:
- “Tax d’habitation”, which is essentially a tax to live in a house of €642.
- “Montant de votre contribution à l’audiovisuel public”, translated a contribution to public audio and video (!!) of €131.
- “Ordures menageres”, which we think is emptying of bins, amounting to €515.
That’s another €1300 which we hadn’t budgeted for – it’s a good job we have an emergency fund!!
These taxes can change depending on the physical size of your property, what street you live on and how often your bins are removed, etc. Therefore, before you move, ask locals to see what other taxes and expenses people pay in order to effectively budget for taxes. Once you have moved in, you may want to speak to a neighbor about it to ensure there is nothing that you’ve forgotten.
Moving To France From UK – Mistake 3: Healthcare Costs
When we started our new job, we were informed by our employer that they would “take care” of our social security and healthcare insurance applications.
Coming from the UK where medical costs are covered by the NHS, we knew that there would be differences in France. However, we made the mistake of placing too much trust on this one statement from our employer.
Following a herniated disc and a subsequent cycling accident, I needed hospital scans, consultations and prescriptions. I paid for all of these costs, amounting to hundreds of euros. When I went into the social security office to obtain my reimbursement, I was informed that I wasn’t registered on their system.
Upon discussion with my employer, I was informed that they had essentially done nothing. There started my rocky relationship with French bureaucracy. 9 months later, I have incurred hundreds of euros of additional expenses as a result of a cycling accident and, despite a weekly trip to the social security office, I have still only got to the stage of having “temporary” number.
I am now only missing a “carte vitale”, a “numéro mutuelle” and a “carte mutuelle” and then I can start to reimburse my costs. However, I have helpfully been informed that I may not receive the refunds as the accident occurred too long ago!!
Therefore, to avoid this, make sure that you go to the social security office (CPAM – Caisse Primaire d’Assurance Maladie) and register immediately for your carte vitale and permanent social security number. You will also need to register with a doctor to ensure that you can claim back your medical expenses.
The general process is that the state will pay for 70% and you, or your employer’s insurance, will be liable for the remainder. However, this changes depending on the process, so given on any health issues you have, go to the CPAM office and discuss specifics with them.
Moving To France From UK – Mistake 4: Lack Of Furnished Rental Apartments
You will also need to spend some time before you move to find somewhere to live. If you plan on moving without many belongings into a rented apartment/flat, then you may be surprised how few furnished properties are available.
You may assume that the split between unfurnished/furnished accommodation would be the same as in the UK. However, it is more very normal for French people living in large cities to live in apartments for their entire lives. When people move, they do so for a long time and hence they take their stuff with them. Therefore, there is very little demand (and hence supply) for furnished rental property.
So that you can learn from our mistakes, we moved a full week before we started work in order to arrange our accommodation and booked one week in a cheap hotel in advance (also benefiting from cash-back and hotel rewards).
However, after the first week, it became more difficult to look for an apartment after we had started work. In the end, it took us four weeks to find a suitable place. This meant an additional 3 weeks of hotel costs which we had not budgeted.
Therefore, think about this before you move to France and try to have your search for somewhere to live mostly done before you arrive here. Also, have a budget set aside for hotel costs if you cannot find what you want straight away.
Moving To France From UK – Mistake 5: Bank Account Charges & Forex Fees
Banks also work a little differently in France (it’s amazing the number of differences between two countries only separated by 21 miles of water)!
In the UK, if you pay everything on time, there is no charge to have a bank account. When we set up our account in France, we assumed it would be the same. And it was for the first year. However, we have since found that after this grace period, all banks charge a monthly fee to have a bank account and a credit card. Ours is currently €8 a month, which is now being added to the monthly budget!
If you are moving abroad on a short term transfer, you may be keeping bank accounts and other assets in the UK. When moving money back to your home country, you should consider the effect of exchange rate fluctuations on your money.
Additionally, you must be prepared for changes in exchange rates. This is generally quite stable as the euro isn’t particularly volatile against the pound, but you should definitely give yourself a 5-10% leeway where the exchange rates may fluctuate.
Finally, there is often a fee for moving money between countries. This could be a one-off fee or a percentage fee on the money you transfer. However, banks also often disguise the “fee” by transferring the money at an exchange rate less favorable that the true exchange rate on the day. If you are transferring large sums of money, this can be a significant cost. When transferring between different currencies, investigate forex transfer services to France to minimize the costs.
Anything I’m missing when moving to France from UK? Let me know in the comments below. Equally, if you have moved from the UK to another country and want to write a similar article for moneystepper, feel free to get in touch.