“Sending money home is something I have to do, it’s not an ‘I would like to do this,’” says Toyin Oshinowo.
A project manager who moved to the UK from Nigeria when she was one, Oshinowo, 42, remits money between her “two homes” to support friends and family and pay bills in Nigeria.
But lately sending money back home has got much harder, as food and energy prices in the UK continue to soar, forcing Oshinowo to cut back on spending to continue supporting relatives. “You find yourself sacrificing certain pleasures in order to have enough to send [home], but you still want to enjoy your life so you really have to budget.”
With households enduring a drastic fall in living standards amid price rises running at 10.7%, people who make regular remittances are expected to be among those hardest hit.
Estimates compiled by the World Bank show people in Britain send billions of pounds overseas each year to friends, family and other contacts. Countries with historical ties to the days of empire and with large diasporas living in the UK are the largest recipients – led by Nigeria, sent more than £4bn a year, and closely followed by India and Pakistan.
Countries within the EU also have significant links, reflecting migration flows in recent decades before Brexit, with more than £1bn a year sent to Poland, as well as similar amounts to France and Germany. Those flows of money are hugely important for developing economies, vastly outweighing foreign aid sent by governments.
Two in five Britons (40%) who typically send money abroad now help fewer relatives as a result of the increased cost of living, according to recent research from WorldRemit, a global payments company. More than half (53%) said that their disposable income has gone down in recent months.
Dr Richmond Ehwi, a researcher at the University of Cambridge who studies the impact remittances sent from the UK to Ghana have on living standards, says many migrants are being “pulled from both sides”. As prices have increased in developing countries since Russia’s invasion of Ukraine, people are also facing “the double impact of inflation and the cost of living crisis in [their] home country,” he says.
“In certain cultures, [remitting money] is part of you. Even if you become very affluent … you’re always thinking about your family.”
Ehwi, who lives with his wife and young daughter in Cambridge, sends money to Ghana, and is facing the squeeze. His monthly electricity bill has more than doubled, and he has had to limit the amount he spends on “luxuries” such as taking his wife out to eat. “The frequency I’m sending money home is increasing because the economic situation in Ghana is worse than the UK … [but] I’ve received practically nothing to help deal with the cost of living here.”
Traditional money transfer shops often charge high transaction fees, which Ehwi says is also affecting people’s ability to send money home. “If you have to pay higher in terms of the charges, that ultimately reduces how much you can send back home,” he says.
Oshinowo has had to experiment with “risky” routes to continue sending money to family in Nigeria, including using fintech companies, crypto and informal peer-to-peer exchanges.
“Sending money from Nigeria to the UK has now become an extremely expensive affair. It’s quite painful,” she says.
Oshinowo tried using cryptocurrency to remit, but had to convert money into dollars before it was sent. “It’s almost like it’s a black box … 15 minutes after you purchase crypto, you don’t know what the value is,” she says.
“Often I’d do the calculation afterwards and realise it was terrible in comparison [with] what was on the market. I didn’t like it … but sometimes it was the only choice I had.” Crypto is now banned in Nigeria, but Oshinowo says she would not use it anyway because of the insecurity of the exchange rate and weak value of the pound after the mini-budget in September.
She has started using fintech companies such as Kuda to send money to Nigeria, as she tries to reduce how much she spends on transfer fees. “Say for instance before I could send £20 a week, now I’d probably reduce it to £15 given how much I have. But because the naira [Nigerian currency] has devalued at a higher rate than the increase in cost, the people receiving it don’t notice that much of a difference,” Oshinowo says.
“What the cost of living means for me is that there is now less disposable income to send back. This means if I am sending money back, I’m sending it as cheaply as possible. I don’t want any exorbitant fees, any surprises or anything like that but there is always a risk factor.”
Councillor Ibrahim Ali, who represents Bruce Grove in Haringey in north London, which has a large immigrant community, says the council is conscious of the difficulties in supporting families overseas, given rising living costs in the UK. “We’re seeing that people are really going without in terms of cutting back on their shopping and that is quite concerning,” he says.
“Some of these households are the most deprived and they’re already among the lowest paid. Often, [sending remittances] is not something people are upset about. They are very happy and proud that they can help support family abroad but they also have dependants here they have to support.”
