Living costs: Living in the UK is relatively expensive compared to most other countries. However, if you budget well, share accommodation and shop in the right places, you can easily cut costs. Below is a guide to living expenses: 

Taxes: In general, there are four main types of tax in the UK: 

• Income tax is the tax that you pay on your salary when working in the UK
• National Insurance contributions build up your entitlement to social security benefits, such as a State Pension. The type and level of contributions you pay depends on how much you earn and whether you're employed or self-employed.
• Council tax is a tax set by local authorities in England, Scotland and Wales to pay for local services that they provide, such as rubbish (trash) collection, the police and the fire brigade. Usually, students do not have to pay council tax but it depends on where they live and who they live with. Click here for more information about Council Tax: http://www.ukcosa.org.uk/files/pdf/info_sheets/council_tax.pdf
• Value Added Tax (VAT) is a 17.5% tax charged on most goods bought in shops. Remember to reclaim the VAT you have paid through the Retail Export Scheme operated in specified tax-free shops which can be found all over the UK.

HM Revenue & Customs is responsible for tax issues in the UK. Visit their website at: http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/index.htm

Banking 

Bringing/transferring money: If you are an EU citizen and travelling from within the EU you can bring in and take out bank notes, travellers' cheques, letters of credit etc. to and from the UK in any currency and up to any amount. If you are travelling to or from a country outside the EU, you will need to declare any sums of cash of 10,000 Euro or more (or the equivalent in another currency) to HM Revenue & Customs (HMRC).

Transferring money: When transferring money to the UK it is likely that you will encounter fees, charges and the effects of exchange rates each time you make a transfer. You should consult your local bank and the bank to which you wish to receive money for their rates of exchange and to find out more about transferring money.  

ATMs (cash machines): You can use international credit cards, debit cards and bank cards at ATMs if they have a four-digit PIN code. Generally speaking, any cash machine that displays the Visa badge can be used by Plus cardholders and those displaying the MasterCard sign can be used by Cirrus cardholders.

Credit cards: All credit cards that bear the Visa, MasterCard or American Express logo are widely accepted in the UK. If you have a different card, check with the retailer before using it.

Opening an account: If you’re planning to stay in the UK for at least six months then it’s worth opening a UK bank account. This is usually very straightforward and requires you to call into the bank and take proof of your identity, such as your passport, your employment contract or a letter from your university, and proof of your address. You will have to fill in an application form once there. Click here to read more: http://www.bank.org.uk/open-bank-account/

Insurance 

Before you leave for the UK, there are three types of insurance you should arrange:

1. Travel insurance to cover you and your luggage during your journey. Travel insurance is available from travel agents and some banks.
2. Personal belongings insurance to cover valuable items such as jewelry and cameras while in the UK. These items may be covered by an insurance policy in your home country but check whether they will still be insured when overseas. If not, you should arrange insurance once you get to the UK.
3. Health insurance to cover you against the cost of sickness or injury while in the UK. Make sure you have a medical insurance policy in place before you leave home. If you are from the European Economic Area, you should apply for a European Health Insurance Card (EHIC).