If you are planning to live or work overseas, there are a number of things you need to think about before you move. If you are already living abroad then you will know first-hand how much a move in the exchange rates can affect you.

As an example, the current weakness of the pound has proven extremely beneficial for those moving into the UK, however those moving out of the UK have seen a noticeable and negative impact on how far their Sterling will take them. In October 2007 a EUR 500,000 property in Europe would have cost a UK citizen around GBP 348,000 two years later, the same priced property will cost you GBP 463,000 - an increase of GBP 115,000. This outlines the true extent to which people living or moving abroad can be affected by volatility in the currency markets.

Regardless of this, people still need to make overseas payments and it is therefore crucial that they secure the best possible exchange rate for their transaction. Many people assume their bank to be the best place to exchange currency, unaware that the banks usually offer fairly uncompetitive exchange rates, slower transfer speeds, increased transfer charges and limited access to the various foreign exchange products available.

By using a specialist currency broker you can significantly improve the financial efficiency of your overseas payments, and gain access to products that may be hugely beneficial to you. The service from a broker can be more bespoke and they can save clients between 0.5 percent and four percent on the amount they transact with no charges for commission.

If you already have the funds in place, you could arrange a 'spot transaction'. This is simply the exchange of one currency for another at the current market price where the settlement happens within two working days. A broker should be able to get you a significantly better exchange rate for this transaction.

Below are a list of typical products which brokers usually offer.

Forward  contracts
A forward contract allows you to fix a rate now for a date in the future (up to two years ahead). This means the rate is fixed regardless of exchange rate moves, thereby protecting you if the exchange rate moves against you.

Currency options
A currency option, like a forward contract, allows you to exchange one currency for another on a future date, thereby protecting you from negative movements in the exchange rate. However, with an option, if the rate moves in your favour you can still take advantage of this. There are very few brokers that can offer currency options to clients as it requires additional FSA (Financial Services Authority) authorisation.

Regular payments
If you will be exchanging a set amount of funds on a regular basis for mortgage payments or pension transfers, you can set up a regular payment order which will automatically transfer the funds on a regular basis.

It is worth noting that most of the above transactions cannot be made through the bank, and you would need to talk to a specialist currency broker to see what would be best for your specific needs. Using a broker will also allow you to receive commercial exchange rates, free market updates and a personal service with professional market knowledge.

World First / Expatica

James Glynne-Percy is with World First  foreign exchange specialists. To ask his advice please visit our 'Ask the Expert' channel.