Exchange rate: What are your options if you live in Norway but have income in pound sterling?
The value of the British pound has fallen steeply against the dollar in recent days but also against the Euro – and the krone. So what should you do if you live in Norway but have income – such as a pension, rental income or a salary – in pound sterling?
Exchange rates might sound like a spectacularly dull topic, but if you live in Norway (where, naturally, your day-to-day living expenses are paid in kroner) but have income from the UK in pounds, then the movement of the international currency markets will have a major impact on the money that ends up in your pocket.
This is not an uncommon situation – Norway-based Brits may work remotely as freelancers from British companies and be paid for invoices in pounds, while retired Brits might be receiving a British pension.
Others might have income from rental properties or investments.
So a big loss in the value of the pound against the euro – and by extension, the krone – can have a major impact on Brits in Norway.
The most recent fall in the value of the pound was sparked by the UK government’s new mini budget and has already seen a relative recovery.
But while this one-time fall is spectacular, it’s also part of a longer-term trend in the fall of the value of the pound, especially since Brexit, that has seen people such as foreign-based pensioners lose a big chunk of their income.
So if you have income in pounds, what are your options?
Income in kroner – obviously, this isn’t an option for everyone, especially pensioners, but the best way to protect against currency exchange shocks is to make sure that you’re paid in the same currency that you spend in.
While the krone is traditionally weak against the pound, it is known as a safe and stable currency as Norway has no net debt, and the Norwegian krone isn’t pegged to another currency.
Alternatively, income in euros: the advantage of the euro is that for those being paid from abroad, billing in euros means you could work in any EU country – including the anglophone ones like Ireland – and get your salary in euros.
Depending on your employer, it might also be possible for you to ask to bill in euros.
Work in Norway – if you’re currently not working or want to switch to local currency income, then an obvious option is to take up some work in Norway.
Depending on your work and residency status, as well as the field you work, the practicality of this option ranges wildly from one person to the next.
Exchange rate – if your income can only be paid in pounds, it’s crucial to ensure that you get the best exchange rate possible and that you don’t waste money on international transfer fees.
The best options here are online banks or money transfer services, which compete on the rates that they offer, so usually have the most advantageous rate.
Some online banks also have the option to set up accounts in both pounds and kroner, so that you can receive money in pounds and spend it in kroner without having to make bank transfers, which can attract fees.