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How Brexit will affect finances for Brits overseas
| Published: | 18 May at 6 PM |
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Tagged: Money Transfer, UK, Money, Euro, Exchange Rates, Pension Transfer, England, Currency Transfers, Living Abroad
With so much uncertainty as regards the Brexit effect on freedom to live and work in the EU, a shift of expat focus to the financial consequences of a hard deal can at least help with contingency plans.
Basically, the major effect on expat finances is certain to be the fate of sterling once Brexit becomes an uncomfortable reality. If you’re planning to return to the UK, exchange rates will make no difference to your monthly state pension, but if you’re determined to stick it out in Europe by whatever means necessary or are permanently resident overseas, exchange rate fluctuations may well cause financial pain. Furthermore, experts are foreseeing a combination of rising inflation, a weakening economy and a plunging pound, all of which could seriously deflate your UK-based pension pot.
Annual state pension updates are set up to be victims of Brexit, and the latest Conservative pledge to end the triple lock and cold weather payments will affect even expats who live in countries with reciprocal agreements. It’s unlikely that any mutual agreements will be struck by the UK in order to safeguard the upgrades now being paid to expats in Europe. Losing the free healthcare allowed via the European Health Card looks likely to become yet another casualty of Brexit.
The present system is a literal lifesaver for expat retirees living in Europe, with the hard Brexit favoured by May the least likely to produce any solution beneficial to Britons living abroad. Further falls in sterling as the UK’s economy worsens will result in private healthcare and long-term care becoming even more expensive, and there’s a chance that restrictions or even total curbs on local healthcare for British expats might result.
If you’re still banking or earning money in the UK and transferring money to pay bills, a falling pound will hit hard, making payments more expensive along with the local services you’re paying for. In the same way, your cost of living will soar, with the true cost of the weekly shop rising as sterling continues to fall. The larger the amount transferred the more you lose, with the only sensible option being to discard bank-to-bank transfers in favour of online international money transfer services offering better exchange rates, lower fees and faster transfers.
Basically, the major effect on expat finances is certain to be the fate of sterling once Brexit becomes an uncomfortable reality. If you’re planning to return to the UK, exchange rates will make no difference to your monthly state pension, but if you’re determined to stick it out in Europe by whatever means necessary or are permanently resident overseas, exchange rate fluctuations may well cause financial pain. Furthermore, experts are foreseeing a combination of rising inflation, a weakening economy and a plunging pound, all of which could seriously deflate your UK-based pension pot.
Annual state pension updates are set up to be victims of Brexit, and the latest Conservative pledge to end the triple lock and cold weather payments will affect even expats who live in countries with reciprocal agreements. It’s unlikely that any mutual agreements will be struck by the UK in order to safeguard the upgrades now being paid to expats in Europe. Losing the free healthcare allowed via the European Health Card looks likely to become yet another casualty of Brexit.
The present system is a literal lifesaver for expat retirees living in Europe, with the hard Brexit favoured by May the least likely to produce any solution beneficial to Britons living abroad. Further falls in sterling as the UK’s economy worsens will result in private healthcare and long-term care becoming even more expensive, and there’s a chance that restrictions or even total curbs on local healthcare for British expats might result.
If you’re still banking or earning money in the UK and transferring money to pay bills, a falling pound will hit hard, making payments more expensive along with the local services you’re paying for. In the same way, your cost of living will soar, with the true cost of the weekly shop rising as sterling continues to fall. The larger the amount transferred the more you lose, with the only sensible option being to discard bank-to-bank transfers in favour of online international money transfer services offering better exchange rates, lower fees and faster transfers.
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