8 Ways Life Could Change Financially If There Is A Brexit
With referendum day tomorrow, here are 8 ways your life could change financially if there is a UK exits the EU.
The odds of leaving the EU was 1/7 2 weeks ago, but now is just 1/2. However, what would be financially different if the United Kingdom Left the European Union.
- Household Bills:
Household bills are, on average, the top concern for 6,000 adults, according to a CompareTheMarket poll. This was a higher concern than immigration and jobs.
Fuel is unlikely to increase, as the price is in the US dollar and the only way the price would change is if the conversion rate changed. However, if the UK exit, the emergency ‘no’ budget could force a rise in fuel and income tax. The basic rate income tax could rise to 22% and the higher rate income tax could rise to a much as 43%, according to the chancellor.
- House Prices:
House prices have already been stalled pending the result of the referendum. However, The National Association of Estate Agents says that house prices could fall by £2,300 on average by 2018. and houses in London could fall by £7,500 on average. The managing director says that there will be less buying and selling activity, with 40% fewer buyers already.
Foreign investors who have bought properties in popular areas are now more likely to take the business elsewhere in the world. New buyers are adding a ‘Brexit clause’, so if the UK vote leave, they can get their deposit back.
The lower prices may be a good thing for first tie buyers, but a financially stable job and confidence that the future will be prosperous for owner’s of property. Rent is another area where prices could fall, which is good news for tenants but not as good for landlords.
If you are thinking about a loan, waiting another month could be the best thing to do. A Brexit could get you a better deal, according to mortgage expert Ray Boulger. The rates fell to an all-time low last week. The Government would try to keep the interest rates as low as possible if the UK does leave, but the rates would have to rise at some point to cap inflation
Holidays in other European countries would become harder, as the pound is fluctuating a lot this year. At the start of the year the pound to euro exchange rate was £1 to €1.36, but is now £1 to €1.28. So if you convert £1,000 you would receive roughly £60 less than converting earlier in the year.
The European Health Insurance Card would also become invalid. This means that you would now need to pay for health care whilst in place the European Health Insurance Card would have previously covered.
Roaming charges could also increase if there is a Brexit, as European rules cut roaming charges and if the UK is no longer part of the EU, we will not benefit for the rules. Even though, the charges have been cut, the rules will get rid of the charges all together by next year. The charges will increase for UK travellers.
Airline cost will also increase, as the UK has an arrangement called the Open Skies arrangement, where airlines in Europe could fly in and out of European airports with ease. This has helped budget airlines grow. However, if the UK leaves, the arrangement will be lost, but the arrangement could be renegotiated. If a flight
It is more than likely that the pound is going to fall and the UK stocks will drop in value all because of a Brexit.
The index of the UK’s 100 biggest listed companies, the FTSE 100, are down 3.5% so far this year. However, investment broker, Darius McDermott, says that he expects the FTSE 100 to fall to about 10% if the UK leave the EU. Worried investors have been seen to direct their money into stocks that will give positive returns, stocks that do not depend on economic or political change.
The chief investment officer at Rathbone Investment Management, Julian Chillingworth predicts that either outcomes in the referendum ‘the UK market will settle, while any dips could present good buying opportunities.’
After a Brexit, there will be higher interest rates, which is good news for savers, whose savings accounts have been made smaller in recent years.
Sue Hannums says: ‘The general flight to safety ahead of the referendum means providers appear to be awash with cash. This means they don’t need to make too much effort to attract money.’ ‘Savings rates have been on a downward spiral since 2012 while the base rate has remained static at 0.5 per cent for more than seven years. This would make you believe that providers no longer need a cut in the base rate to lower rates again and again.’
The savers would see their returns are smaller than usual, as the increase infiltration would decrease them.
Currently the pensions are protected by the ‘triple lock’, with an annual increase of either 2.5%, the rate of inflation or the increase in of average earnings. The choice is whichever is highest. However, the Chancellor stated that the triple lock could be subject to pressure. This is because of the hole a Brexit would leave in the financial capabilities of the country and it would no longer be affordable. If the UK leave and the stock markets ‘crash’, a private pension would become smaller and those people close to retirement would be worse off as they won’t have time to add to their pension ‘pot’. If the exchange rate makes the pound ‘weaker’, retire expatriate would receive less of their money.
Traders will need to renegotiate their agreements with the EU countries they want to trade with if the UK exits the EU. The new agreements could take as much as couple of years to finalise the agreement, with the uncertainty of a new agreement confidence and the economy will be hurt.
Business being uncertain means that employers are less likely to invest and hire new employees. European Trade jobs will be most at risk of being made redundant.