Money and credit
Bank notes in the UK come in denominations (values) of £5, £10, £20
and £50. Northern Ireland and Scotland have their own bank notes which
are valid everywhere in the UK, though sometimes people may not realise
this and may not wish to accept them.
The euro
In January 2002 twelve European Union (EU) states adopted the euro
as their common currency. The UK government decided not to adopt the
euro at that time, and has said it will only do so if the British
people vote for the euro in a referendum. The euro does circulate to
some extent in Northern Ireland, particularly in the towns near the
border with Ireland.
Foreign currency
You can get or change foreign currency at banks, building societies,
large post offices and exchange shops or bureaux de change. You might
have to order some currencies in advance. The exchange rates vary and
you should check for the best deal.
Banks and building societies
Most adults in the UK have a bank or building society account. Many
large national banks or building societies have branches in towns and
cities throughout the UK. It is worth checking the different types of
account each one offers. Many employers pay salaries directly into a
bank or building society account. There are many banks and building
societies to choose from. To open an account, you need to show
documents to prove your identity, such as a passport, immigration
document or driving licence. You also need to show something with your
address on it like a tenancy agreement or household bill. It is also
possible to open bank accounts in some supermarkets or on the internet.
Cash and debit cards
Cash cards allow you to use cash machines to withdraw money from
your account. For this you need a Personal Identification Number (PIN)
which you must keep secret. A debit card allows you to pay for things
without using cash. You must have enough money in your account to cover
what you buy. If you lose your cash card or debit card you must inform
the bank immediately.
Credit and store cards
Credit cards can be used to buy things in shops, on the telephone
and over the internet. A store card is like a credit card but used only
in a specific shop. Credit and store cards do not draw money from your
bank account, but you will be sent a bill every month. If you do not
pay the total amount on the bill, you are charged interest. Although
credit and store cards are useful, the interest is usually very high
and many people fall into debt this way. If you lose your credit or
store cards you must inform the company immediately.
Credit and loans
People in the UK often borrow money from banks and other
organisations to pay for things like household goods, cars and
holidays. This is more common in the UK than in many other countries.
You must be very sure of the terms and conditions when you decide to
take out a loan. You can get advice on loans from the Citizens Advice
Bureau if you are uncertain.
Being refused credit
Banks and other organisations use different information about you to
make a decision about a loan, such as your occupation, address, salary
and previous credit record. If you apply for a loan you might be
refused. If this happens, you have the right to ask the reason why.
Credit unions
Credit unions are financial co-operatives owned and controlled by
their members. The members pool their savings and then make loans from
this pool. Interest rates in credit unions are usually lower than banks
and building societies. There are credit unions in many cities and
towns. To find the nearest credit union contact the Association of
British Credit Unions (ABCUL) on www.abcul.coop .
Insurance
As well as insuring their property and possessions, many people
insure their credit cards and mobile phones. They also buy insurance
when they travel abroad in case they lose their luggage or need medical
treatment. Insurance is compulsory if you have a car or motorcycle. You
can usually arrange insurance directly with an insurance company, or
you can use a broker who will help you get the best deal.
Social security
The UK has a system of social security which pays welfare benefits
to people who do not have enough money to live on. Benefits are usually
available for the sick and disabled, older people, the unemployed and
those on low incomes. People who do not have legal rights of residence
(or 'settlement') in the UK cannot usually receive benefits.
Arrangements for paying and receiving benefits are complex because they
have to cover people in many different situations. Guides to benefits
are available from Jobcentre Plus offices, local libraries, post
offices and the Citizens Advice Bureau.
