Financial Assistance

The RAF Alconbury A&FRC manages the Personal Financial Management Program (PFMP). This program is designed to help individuals and families successfully manage their finances and find solutions to personal financial problems they have encountered. If you are planning your move to Alconbury, visit your base's PFMP manager to preplan financial budgets in preparing for a PCS move. If you need assistance or advice on your finances after you arrive, visit the RAF Alconbury PFMP counselor. If you need financial information specific to how to handle your British finances prior to arrival, e-mail the relocation section.

Banking in the UK – Things to Consider 
While in the UK, you most likely will have to purchase British “Pound Sterling” on a regular basis 
so setting up a British Pounds/Sterling account is highly recommended – especially if you plan on 
living on the economy. 
Banking in the UK can be somewhat challenging, so you’ll need to exercise patience due to the 
amount of time it will take to open an account, transfer funds to your account, and use your 
account for needed payments. Please note, it is NOT possible to open a British Sterling account 
before you arrive since the UK law requires that you be physically present.

SETTING UP AN ACCOUNT AND WITHDRAWING FUNDS 
There is one US-affiliated bank, Community Bank, on RAF Alconbury, RAF Molesworth and RAF 
Croughton. Community Bank is also on RAF Lakenheath and RAF Mildenhall. There is one US Credit 
Union on RAF Alconbury, RAF Lakenheath and RAF Mildenhall - Keesler Federal Credit Union (KFCU). 
It’s important to note that although Community Bank is a subsidiary of Bank of America, there is no 
connection between a person’s Bank of America accounts in the states and the accounts you open in 
the UK with Community Bank. 
Most personnel assigned to RAF Alconbury, RAF Croughton and RAF Molesworth use one of these two 
banking institutions to pay for rent, utilities, cell phones, and other personal expense on the 
economy. This is done by Direct Debit at Community Bank and Sterling Bill Pay at KFCU – methods 
familiar to US personnel, but different as they are governed by Defense Finance and Accounting 
Service (DFAS) regulations and UK banking laws. Please understand this as it will help as you 
encounter rules and procedures you may not be used to. 
Once you arrive and in-process, you will need to schedule an appointment at either institution to 
open an account. Plan on the appointment lasting about one hour and remember you will need your APO 
mailing address, and your military ID for the appointment. It would be good to bring your military 
orders, just in case. During this appointment, they will help you setup online banking either by 
Direct Debit or Sterling Bill Pay, based on which institution you are using. Anyone you want on the 
account must be physically present with his or her military/dependent ID Card. 
If you desire to use your debit card from the institution on the economy, we advise you to provide 
your UK address to your account so as to avoid potential problems in using the debit card. This 
address can be either the UK-associated address on your APO box, or the UK physical address once 
you acquire a residence off base.

Account Specifics to be aware of

Exchange Rates: It is important to know the daily exchange rates at both institutions, and at all 
AAFES locations, are set by DFAS according to their agreement to operate on US installations – the 
institutions cannot change it. This means the exchange rate will NOT be the same rate you will see 
off-base – it is typically more favorable off-base. There is a trade-off between the convenience of 
using the on-base banking institutions and the off-base vendors/ATMs, etc. This means it tends to 
be cheaper to pull Sterling off your cards at off-base ATMs, though the UK banks may charge an 
ATM fee. You can also bring USD into the banking institutions on base to exchange to Sterling,  but you will pay the DFAS exchange rate, not the international exchange rate.

General ATM usage and using your US Credit Cards: Be sure to check with your stateside bank to 
determine what charges and fees you will pay when using your stateside debit and or credit card 
overseas. Many banks charge international fees, which will add up over the course of 2-3 years. 
Additionally, VISA debit cards, do not work at many ATMs in the UK, nor do debit cards work at 
local establishments like you are used to in the US. 
Also keep in mind that some ATMs in the UK will ask you if you want to convert your dollars into 
pounds using their exchange rate listed on the screen or continue without the conversion. It is 
recommended that you always select continue without the conversion so you get the cheapest 
international exchange rate. This is the same for purchases at establishments on the economy and 
online– make the purchase in Sterling to avoid the store’s conversion rate.

Community Bank: We highly recommend you take the option to open a US Dollar (USD) and Sterling 
account with the bank to increase needed flexibility. You can also ask for a British Debit Card 
(Chip and Pin).  You can use this Chip and Pin Debit Card anywhere, but you will still have to sign 
the receipt when making purchases.  When you use your Community Bank debit card to make a purchase 
in Sterling off base, the money is deducted from your dollar account at the DFAS rate set for the 
Community Bank. Also be aware that when making purchases off-base with your debit card, you will be 
charged a surcharge at the point of sale – roughly 1%. 
If you withdrawal cash from your Community Bank account on base you will have the option to 
withdrawal money from your dollar account or your Sterling account. You are not given this option 
when using an off-base ATM which only provides Sterling. NOTE: since Community Bank uses the UK 
Barclay’s Bank debit system, Barclay ATMs may not charge a fee to withdraw Sterling when using your 
Community Bank ATM card, but that is only typical at local ATMs around the base (Huntingdon, for 
example, by RAF Alconbury). Furthermore, Community Bank does charge $1.50 to use an off- base ATM, 
unless it is a Barclay ATM. 
Community Bank does NOT offer a phone app, nor a web service, to set up and make bill payments 
from, but this is something being worked for future application. You will need to set up your bill 
payments at the bank. 
Community Bank does NOT currently offer overdraft protection on your Sterling Account, but it does 
offer it on your USD account. For access to your account, go to: https://www.dodcommunitybank.com 
and to see where locations are, go to: 
https://www.dodcommunitybank.com/home/locations/united_kingdom. To view the daily exchange rate the 
bank is using, go to: https://www.dodcommunitybank.com/home/currency_exchange/sterling

KFCU: When opening an account with KFCU, you can receive an ATM card for a Savings account and a 
checking account debit MasterCard. KFCU often has incentives for opening an account and setting up 
Sterling Bill Pay – look for those when you set yours up and make sure you understand the rules to 
receive the incentive. 
Withdrawing money with a KFCU card on base is free, but they charge $2.00 for every withdrawal 
off-base and an International Transaction fee of roughly 1% for every purchase. It is also good to 
know that KFCU offers bill pay from their website. 
NOTE FOR KFCU CUSTOMERS: Those with KFCU accounts can do cash advances with their US debit cards 
(up to $10,000 – restricted by what your US bank allows) with no fee from KFCU (stressed – debit 
card, NOT credit card – cash advances against credit carry fees and immediate interest as always). 
If you are using a USAA debit card, USAA does not charge a fee for the cash advance, but you may 
have to request a debit card cash advance limit increase – this can be done over the USAA App. This 
is a very easy way to get cash in hand quickly if you have a KFCU account. IMPORTANT: The amount 
withdrawing must be in your US bank account or overdraft and other fees may apply! Most banks, like 
USAA, will not allow more cash to be withdrawn in this transaction, but if you take all the money 
out of a regular account you use, you may incur overdraft and other fees as other bills hit the 
depleted account, so pay attention. 
KFCU offers “Shared Branching” through the CO-OP Shared Branching Program, which allows account 
holders to transfer funds from a credit union in the states to your new KFCU account. The transfer 
is free and immediate so this is a good option for accessing your funds very quickly. For CO- OP 
Shared Branching locations, please visit: https://co-opcreditunions.org/locator/search-results/?loctype=AS&country=UK&Submit=Search

OPENING AN ACCOUNT OFF-BASE 
Opening a British Bank Account off-base is only possible when you have a UK Visa which provides 
residency status. Civilian members are required to come to the island with a Visa and Military 
Family members can request a Visa Vignette upon arrival, which takes about 2-3 months to receive 
(and involves surrendering your No-fee Passport during the process). 
To open a British Bank account on the local economy, you will have to make an appointment first. 
When you go to the appointment, you will have to show proof of residency (your Visa), and proof of 
physical residence, such as an active rental agreement or utility bill with the correct British 
address. Each person wanting to open an account must be listed on the rental agreement or utility 
bill. Once a British Bank account is opened, it can take up to 10 days to receive a debit card. 
The advantages of using a British Bank on the economy is the ease in which local payments can be 
made, using account numbers and sort codes. The transaction is immediate and typically can be 
completed using the UK bank’s phone APP. Another benefit to using a bank off-base is you can 
request overdraft protection which is based on income. One significant drawback to using a bank 
off-base is that it is not possible to setup direct transfer deposit from your US bank. In order to 
electronically convert money from a US Bank account to an off-base British Pounds account, you must 
use an online foreign exchange company such as XE.COM. The process to transfer funds from your 
dollar account to an off-base pounds account using a foreign exchange company takes about 5 days 
and has fees associated in the exchange rate or the transaction.

PAYING BILLS 
Whether you use Community Bank, KFCU, or a bank off-base, bills are normally paid by direct debit. 
Which means, the utility company or internet service provider will ask your permission when you 
sign the contract to pull the amount owed each month from your Sterling account automatically each 
month. It is important to watch your bills and ensure you have enough Pounds in your Sterling 
account to cover the upcoming bill, for if a direct debit amount is much higher than you 
forecasted, such as a phone bill, you will have to pay a fee and the direct debit will not go 
through if there are not sufficient funds. This is according to UK banking laws and allowances. 
As an alternative to paying bills via direct debit, you can use your KFCU Checking account to pay 
British bills automatically each month instead of the company taking money out of your account. 
Please remember, if you choose this method, you will get the DFAS exchange rate. KFCU also offers 
overdraft protection with a limit of USD $600.00 which could cover an automatic bill pay if there 
was not enough money in the account. 
You can set up funds transfers from your US bank to Community Bank and KFCU. You will need to plan 
for anywhere from 24-48 hours for the transfers to show up in your UK accounts for use. If you plan 
to fund an account using a check after you arrive, plan on it taking 7 business days to clear 
before you will have access to the funds.  This is a DFAS rule both banks must follow and they have 
no control over. 
Once the money reaches your account you will have four options to pay bills: 
1)   Complete an Electronic Funds (EFT) request – free, but can take up to 3 business days

2)    Set up a Direct Debit – free, but the first one takes a full 5 days by UK banking laws to 
activate where the money MUST be available at the beginning of the 5 days in the account. This does 
cause issues with making your first rental and/or utility payment (see below). So, we recommend you 
have enough Sterling in your account well in advance of your first Direct Deposit due date.

3) Wire the funds - the banks do charge wire fees by UK banking law – up to $25. A wire can take 
one day, if requested before noon.

4) Withdraw the funds at an ATM and physically take it to the business. An ATM withdrawal is 
subject to ATM fees, but there are ATMs in the UK that offer free withdrawals. Your bank may charge 
a fee (see above) to use the off-base ATM, but the ATM does use an exchange rate closer to the 
international rate.

SOME LAST THOUGHTS – BE PREPARED! 
Setting up rental payments takes a minimum of 5 days for the first payment due to British banking 
laws. Again, this means you must have the Sterling available at the beginning of the 5 days in the 
account. If you want to make a payment quicker than the 5 days waiting period, you must plan to use 
cash, otherwise you will have a lot less flexibility. PLEASE NOTE: OHA payments will only hit on 
the mid- and end-of-month days, and will not start until after you sign your lease, which is when 
the British companies require payment – so plan on having cash in hand for the deposit and the 
first month’s rent.

The only quick option (outside of using your KFCU account for debit card cash advances – see above) 
is to withdrawal funds through an ATM using your stateside account. Keep in mind, most stateside 
banks limit the amount you can withdrawal in one day and will likely charge ATM withdrawal fees and 
or commissions. Communicate with your bank on the withdraw needs you have to make your first 
payments. One secure method is to bring the cash into the Community Bank and deposit it into your 
Sterling Account, then have the bank give you a cashier’s check (they will charge a fee for this) – 
this way, you aren’t carrying so much hard currency around. 
Most landlords will require the first month’s rent and a security deposit equal to one month’s 
rent. There may also be letting agency fees on top of the security deposit. Consequently, you may 
need 2-4 thousand dollars, converted to Sterling, to secure a rental property. A nice property will 
not remain available long, so it’s important to be aware of the banking challenges and to plan 
ahead.

Your Banking Liaison Officer is the 501st CSW/FM, - DSN: 314-268-3140, commercial: +11-44-1480-84-3140.

The cost of living in the United Kingdom is very high.

While a cost of living allowance is authorized to active-duty members to help defray excess costs, individuals and families should consider setting aside money in savings prior to their permanent change of station move to help meet the cost of the move and initial expenses such as restocking the kitchen and purchasing clothing for a cooler, wetter climate. Families and single service members living on the economy will receive a Move-in Housing Allowance, an initial one-time payment to help defray costs associated with British housing. You can get more information on COLA online.

Department of Defense civilians do not receive COLA, nor will they receive "locality pay" as they do stateside; however, after moving into a home in the U.K., they will begin receiving "post allowance" (in addition to living quarters allowance), which is the overseas equivalent to locality pay.

Overseas Housing/Utility Allowance

An Overseas Housing Allowance is available for service members living off base. OHA compensates members of the uniformed services for the majority of housing expenses, which is comprised of three components: rental ceiling, utility/recurring maintenance allowance, and a one-time move-in housing allowance. Rental property prices vary depending on the size of the home, the location and the amenities. Utility costs vary, depending on the type of heating used in the property: electricity, gas and/or oil. For more information regarding off-base housing, contact the housing office at Royal Air Force Alconbury.

Renting a Home in the UK

There are many nice, affordable houses available in the local community priced within your OHA. It is the initial expense that can be overwhelming to your budget. Be prepared to pay a minimum of one month's rent and a security deposit equivalent to a month's rent before you move in. This can be a major expense costing more than $5,000, so financial planning before you arrive is a must. Finding a home within your allowances is very important because, as the pound/dollar exchange rate fluctuates, this may have a significant impact on your out-of-pocket expenses. If you plan on using your advance pay option, be aware that this amount with automatically be deducted from you pay, reducing your monthly income. For assistance with a relocation budget and spending plan, contact your local Military and Family Readiness Center. Also, visit the Right Move website; it will give you a good idea of what you can expect as far as size and cost of U.K. off-base houses.

Utilities

You will receive additional utility pay based on your rank and marital status while living in the U.K. As long as you monitor your utility consumption, the allowance is more than enough to cover your usage. Be aware, though, unlike the U.S., your utility bills are issued quarterly, which can cause a financial burden if you don't save your monthly utility allowances. To avoid high quarterly bills, ask your utility companies to bill you monthly, making your budget easier to manage.

Value Added Tax

The Value Added Tax is a tax levied on all products and services with the exception of children's clothing and food. The present rate of VAT is 20%. VAT is similar to the sales tax in the United States. This tax is not applicable to items purchased on base. After you arrive, contact the VAT office for information on how to make tax-free purchases on certain items that cost more than £100 sterling. Make sure you contact the VAT office before making any major purchases.

You will enjoy living in the local area much more if you know what to expect and can plan accordingly. It is a fact that some families and single personnel do experience financial difficulties while they are stationed here. The following are some of the most common money problems experienced in the U.K.:

Television Tax

Britain requires a TV license: You get one license per household regardless of how many TVs you have in your home. The fine for being caught without a TV license is around £1,000 pounds sterling plus the cost of your license.

Be sure you obtain your TV license prior to turning on your television. You can purchase a license by phone on 0870-240-3352, online, or at any Pay Point outlet. For more information, visit the U.K. TV licensing website.

In order to receive local reception, your TV must be multi-system one that receives the Phase Alternating Line signal.

Loss of Second Income

Unemployment benefits are not available in the U.K., so families must prepare for the loss of a spouse's income during relocation and job search. Some spouses have a difficult time finding a job or cannot find affordable child care. The Employment Assistance Program at the Military and Family Readiness Center can assist spouses with their job search.

Prices for Items in U.K. Stores

Many people don't realize how much they are actually paying for their purchases in a British store. Prices here may be more than twice the cost for the same item in the U.S. For example, the price tag on a shirt in the U.S. may be $20. The price tag in the U.K. on that same shirt will be £20, but since the exchange rate may be 1.90, the shirt actually would cost $32. The exchange rate changes daily and you will need to be aware of this as these additional costs can add up quickly.

Fluctuating Exchange Rate

The exchange rate can change daily and may go up or down very rapidly. Be aware that if you live on the economy, you will pay your bills (including rent) in pounds and these pound amounts will not change because the exchange rate does. Keep in mind that COLA also fluctuates, and if decreased, the amount of your paycheck will be reduced.

This may sound rather ominous, but your finances can and should be managed regularly to avoid mismanagement of money. Tracking your expenses for several months after you arrive can help you adjust your spending habits, if necessary.