In June 2016, Brits voted to leave the European Union, invoking Article 50. Because this is a completely unprecedented decision, no one can say for sure what this will mean for Brits’ finances.
One big consideration? Their pensions. Since so many Brits opt to retire to various sunny spots around Europe, one of their biggest worries will be the impact of Brexit on their pensions.
The forecast isn’t looking good, as spokespeople point to the declining value of the pound, rises in inflation, and a weakened economy which will cause the value of many people’s pensions to decline.
And the declining pensions aren’t the only problem here. Right now, if Brits retire to countries within the UE, their pension is automatically uprated each year to keep up with inflation. But if Britain leaves the single market, this may end, since pension uprating would depend on mutual agreements struck between Britain and each individual country- many of which are not happy that Britain is leaving the EU.
Right now, Brits are in a good position with universal free healthcare. And expats can take advantage of free healthcare in a number of countries in Europe, including France, Germany, Italy, and Spain.
However, some member states are warning that they may restrict or completely undo this access. That means that expats would no longer receive access to public healthcare while abroad, and would instead need to purchase private health insurance.
This will also impact long term care, as it would cost more for elderly expats to pay for in-home carers.
Another financial consequence for expats, is the increased costs when paying bills locally. Right now, many expats earn in pounds, before paying in a local currency like the Euro. Unfortunately, as the value of the pound continues to be uncertain, this will mean they can never quite know how much their monthly utilities will be, and if anything they’re likely to rise.
If the pound continues to fall, all kind of payments will be more expensive than they were previously. We can expect many things to be impacted, from homeware, food, and living costs, to long-term, larger outgoings like car financing and mortgages. Unfortunately, this may be a sudden change, and expats may find that these prices increase without warning.
After the referendum, Brits realised that the pound was already declining against the euro and dollar. This means that transferring large sums of money is likely to be much more expensive. For this reason, it’s best to bypass the banks altogether, and instead use an international money transfer firm such as CurrenciesDirect, which will help Brits avoid hidden charges.
Banks often have many different charges, while currency conversion companies allow you to transfer your money securely, whenever you want.