HOW BREXIT WILL IMPACT YOUR FINANCES
The topic on everyone’s lips at the moment seems to be whether or not there will be a deal for the UK’s imminent departure from the EU. The question no one seems to be able to answer though is how Brexit will impact your finances.
It’s a subject that everyone has an opinion on but which no one will commit to giving any advice upon. As frustrating as that might be, it’s actually very wise not to. After all, with the amount of uncertainty surrounding the topic, there is no way of knowing. The only certainty is that Brexit’s impact will be largely unknown until it actually happens.
That said, there is a lot of ‘scare-mongering’ going on that may never come to pass. So, we’ve written this article to try and record those things about how Brexit will impact your finances that we do know!
Is there anything we actually do know about how Brexit will impact your finances?
As with all things Brexit-related, the only certainty is uncertainty. In terms of your finances, this is a really useful piece of information. It tells you that it’s probably best not to make and knee-jerk reactions for the time being; or if you do need to make any financial decisions, that you should be prepared to factor in possible changes.
Deal, or ‘No-Deal’ – what’s the impact?
For the moment, how Brexit will impact your finances will depend largely on whether the UK leave Europe with or without a deal in place.
In the case of a Deal…
The likelihood is that Europe will insist that the arrangements it already specified are kept. As these include no changes in consumer rules, regulations and prices until 2020 at the earliest, this would effectively give you some breathing space for watching how the economic landscape unfolds.
In the case of ‘No Deal’…
In the case of ‘no-deal,’ the economic landscape will change quite quickly. Any positive ramifications of Brexit will be sluggish – they’ll be the last to present themselves! Worse still, people take time to adapt to change – so we can surely expect a couple of years of turmoil before things settle. But… time is a great healer and settle they will…
So, what does this mean for how Brexit will impact your finances in the event of ‘no-deal?’ It means, you can expect dramatic and rapid change but if ‘you can keep your head, whilst all those around you are losing theirs…’
What can you do right now to prepare for how Brexit will impact your finances?
- Don’t panic!Watching the markets for every economic shift during Brexit is likely to make anyone nervous. The reality though is that the markets are almost always volatile around any ‘uncertainty’ or ‘change.’ And those two terms have perhaps never been so neatly intertwined together before as they are in Brexit!That the markets will react to Brexit is inevitable – BUT only in the short-term. In the long-term, we can expect the practical effects to take over just as they usually do.
- Remember that there is no knowing which way Brexit will go!While the press has revelled in whipping every possibility up into a frenzy, little is said of the fact that Brexit could well increase your pensions and investments… you just never know!
- Focus on the swings and roundabouts!The Bank of England suggests that the economy will decline as a result of Brexit. In this event, they will almost certainly drop interest rates to make borrowing cheaper. Following suit, if borrowing is cheaper, people will spend more and… the economy will be stimulated.
- Focus on your own personal finances!Rather than trying to pre-empt economic shifts, clarify what your financial situation is and what your short, medium and long-term goals are. It’s important that you focus on what you are aiming for and whether you are on track, rather than what the markets are doing from one day to the next!