As the dust settles on the EU referendum results, it’s time to make your Brexit financial plan.
Although it’s still early days, you’re probably thinking already about how the UK leaving the European Union is going to affect your pocket or your bank balance.
To help you plan accordingly, we are going to review the issues that are most troubling our clients when it comes to Brexit, with some points to consider when looking ahead.
How will Brexit impact your everyday finances?
While the exact impact of leaving the EU is unknown as yet, many predictions have been made that could have a significant impact on day-to-day finances.
For starters, the weak pound will make the price of going on holiday more expensive, while travel insurance policies could also be affected if Britons are no longer allowed to use your European Health Insurance Card (EHIC).
Using a mobile phone abroad could also become more expensive, as the UK will no longer be automatically included in the EU cap on roaming charges.
Back on home soil, domestic bills could rise as a result of Brexit. Many experts have already warned about a rise in the cost of petrol, while energy bills could increase because gas and electricity tariffs are linked to the price of oil.
Certain jobs could also be under threat, as employers halt growth plans of decide to move their manufacturing and/or production to another country. Lush is an example of this; the bath product company has publically declared that while it will keep its factory open in Dorset, future investment will be diverted its German operation, constricting UK growth expansion opportunities.
How will Brexit affect your home?
Homeowners will potentially be impacted by more than just rising utility bills.
Property prices could fall over the coming months, as cautious house hunters back away until they know the full consequences of leaving the European Union.
Even when the initial shockwave subsides, the UK property market is still not immune from the impact of Brexit. Anticipated inflation could lead to an increase in interest rates, which will mean thousands of homeowners paying more interest on their mortgage.
The buy-to-let sector could also be hit if restrictions on freedom movement come into force, as there will be fewer renters on the market to stimulate competition.
How will Brexit impact your savings and investments?
A rising interest rate is good news for savers, who have been feeling the burn of low interest rates for years. However, they are more likely to move lower in the near term.
This is not such good news for pension holders, as leaving the EU could threaten the ‘triple lock’ protecting state pension contributions. This is where pension values increase either by 2.5% annually, or by matching the rate of inflation or the increase in average earnings.
There could also be a threat to expat pensioners currently living outside the UK and receiving their retirement contribution. They would have already seen around a 15% reduction in their income, especially if conties that use the Euro or US Dollar.
For investors, the stock market will show a certain level of volatility as Brexit deals are struck and regulations created to protect and independent Britain. Some people may actually benefit from this activity, however, by making small lump sum purchases during market dips.
Your Brexit financial plan
A lot of economic uncertainty lies ahead, so it is understandable that many people are looking for external support preparing for the effect of leaving the European Union.
Now is the time to start planning your personal finances for uncertainty. Our professional team can you to explore your options and define a plan right for you.
Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of, and reliefs from, taxation are subject to change.