On June 24th last year, the British people voted to invoke Article 50 and to leave the European Union – a move unprecedented in the Union’s 60+ year history. Because of this, nobody can claim to be 100% certain as to what exactly Brexit will mean for UK residents from a financial perspective, leading to a great degree of uncertainty for most of us in several key areas.
Funding for a pension
Considering the masses of Brits opting to spend their twilight years in the European sun, one of the main worries among expats in the wake of Brexit is how their pensions will be affected.
The forecast is fairly negative with spokespeople pointing to a combination of rises in inflation, the plunging value of the pound and a weakened economic environment leading to the value of people’s pension pots declining.
There is also the issue of uprating. As it stands, if you retire to countries across the European Economic Area, your state pension is uprated annually in line with inflation. If Britain is to leave the single market there is the danger this could end, as pension uprating would require a mutual agreement to be struck between Britain and the country concerned.
Affording health insurance
There’s no question that our universal free healthcare system has proved to be a (literal) lifesaver for British citizens on more than one occasion. Currently, British expats can enjoy free healthcare in many countries across Europe including Spain, France, Italy and Germany.
However, in the wake of Brexit it has been warned that member states angered by Brexit could feasibly restrict, or even completely curb, expat access to public healthcare services. This would mean that British expats would have no choice but to pay for private health insurance at a hefty cost. Their access to long term care would also be affected, as the declining pound would lead to in-home carers (who may be required for elderly expats who can’t do everything for themselves), which costs more to hire.
Certainty when paying bills
The declining value of sterling currency would also be unfavourable to expats who may earn their money in pounds, and then pay their bills in another currency such as the Euro. The uncertain value of the pound would add to the already fluctuating amount expats are paying for their monthly utilities and would almost certainly lead to them paying more each month than they were before Brexit.
Impact on everyday living expenses
The falling value of the pound against the euro will make payments of all kinds more difficult and expensive than ever before. Everything will be impacted, from everyday living costs such as food, homeware and essentials, right the way through to larger, longer term outgoings such as servicing a foreign mortgage or financing a car. This will be a sudden change, as expats will find the price of their weekly shop increase almost overnight. Such is the extent of the current economic uncertainty caused by Brexit.
Transferring large sums of money
Once the dust started to clear after the referendum, Brits were left with the reality that the pound was already being affected by uncertainty, as it declined in value against both the dollar and the euro, as well as plummeting to its lowest value since 1985. Because of the notable uncertainty already caused to the exchange rates, transferring large sums of money (e.g. for mortgage payments) in and out of the country could now also be severely affected.
An effective way to make money transfer better for expats could be to bypass the banks and instead opt for the more cost-effective solution of using an International money transferring service, such as Currencies Direct.
This can lead you to better exchange rates – all the more important considering the recent triggering of Article 50 – as well as helping you to avoid those pesky hidden charges.
An added benefit of a money transferring service is that you don’t have to work to the bank’s schedule – you can transfer your money quickly, safely, and securely 24/7.