This is poppycock- if your bank isn’t letting it through it’s their own decision- and ‘terror risk’ is just silly. I wire more than that through our usual bank- USAA- with no trouble. Obviously, if they don’t want to do it you can’t make them, but know that there is no external basis for their policy.
As for phones, we do exactly what you are thinking of doing- swapping SIM cards- and your iPhone 5 is perfect for that. We keep a little case and just swap the SIM cards back and forth depending on where we are. As @JesusWept said, all you have to do is contact your provider and make sure that they have unlocked it. fyi, student consensus is that of the main carriers, Vodafone and Virgin have the best signal coverage in Oxford, O2 and Orange have poor coverage in Oxford.
Out of curiosity, what program is doing that he is accepted without a college?
Finally, to open a UK bank account he will need to be an enrolled student and to have a (UK) address.