With the UK officially leaving the EU on 31 December, it’s likely that it will impact us all in one way or another. Although it’s hard to second guess what specific impacts our departure from the EU will have, the chances are it will affect our household budgets in one way or another – whether that’s food prices going up or investments going down.
The UK is on the brink of leaving with a deal, but it’s likely that Brexit will still see changes to travel and employment that will ultimately impact household finances.
But whilst there is still a lot of uncertainty over Brexit, now is a good time to take a look at your finances to help you become financially resilient no matter what happens on 31 December 2020.
Here’s everything you need to know to help you brexit-proof your finances.
Will the cost of groceries go up after Brexit?
According to experts, it is likely that the costs of your weekly grocery bill will go up, but that doesn’t mean consumers should stockpile.
‘The likelihood is that Brexit will result in food prices going up, whatever the deal is. But I don’t think people shouldn’t panic and start stockpiling; that is a very short term solution,’ says Richard Hyman, partner at Thought Provoking Consulting, a retail consulting firm.
“It’s impossible to say how much prices will go up, but we have to be sensible and not panic buy.”
This week’s border closures in France to UK hauliers may have added fuel to the panic. Ian Wright, CEO, Food and Drink Federation (FDF) warned that Continental truckers will not want to travel here if they have a real fear of getting marooned.
Although borders are now open, many drivers remain stuck.
Supermarkets have already said they do not expect shortages as Christmas supplies are already in.
To help prepare for potential food price increases, take a look at your budget and make sure there is wiggle room in there for any unexpected living costs.
“If you spend every penny you earn every month, any change in income or costs will immediately land you in trouble, so keep a close eye on your spending, and identify areas where you can cut back to free up some cash each month,” Sarah Coles, personal finance expert, Hargreaves Lansdown, says.
If you are struggling with debt and the cost of living, take a look at the tools by debt charity StepChange here which includes tips on managing food costs. If you need help with budgeting, check out Money Advice Service’s budget planner here.
What will happen to my savings?
This year has seen more people focus on their savings than ever before, with the Bank of England reporting a substantial increase in household savings; twenty-eight per cent of those surveyed had accumulated additional savings as a result of the pandemic.
This is good news, but now is a right time to take a look at where you put your cash savings.
“If Brexit causes an economic shock to the system, interest rates could fall even further. However, if it leads to runaway inflation (the increase of prices for goods and services), it could force the Bank of England to raise rates,” adds Sarah.
“Put your cash savings into fixed interest rate accounts, so that if rates do drop, you will have locked in the best ones for now,’”she adds.
Compare saving accounts at Moneyfacts.
Will house prices go up after Brexit?
The jury’s out on this one, with mixed predictions on what impact Brexit will have on house prices. The government’s stamp duty holiday which will end on 31 March, has resulted in house prices going up and Rightmove forecasts a 4% national average price growth in 2021.
If you already have a mortgage and are worried about the economic uncertainty, then consider locking in a low rate with a fixed rate mortgage. Interest rates are currently at record lows, and Brexit could see them go up.
Compare mortgage deals at comparison sites including Moneysupermarket and Moneyfacts. Take a look at online mortgage brokers such as Habito and Trussle too.
What about my investments and pensions?
A new coronavirus strain, part of UK going into Tier 4, chaos between UK and French borders, plus stalemate Brexit negotiations saw the FTSE 100 fall this week by 2% – wiping out billions off the stock market.
So, it’s natural that you may feel nervous about your investment and pension values going down.
But the key is not to make any moves in haste. Remember that investments and pensions are long-term savings and that it is normal for markets to go down as well and up. Stay put and ride out the storm.
Will my EHIC card be valid after the UK leaves the EU?
The European Health Insurance Card (EHIC) gives you free or discounted state healthcare when travelling to the EU, but this will no longer be the case after 31 December.
So, the next time you travel, make sure your travel insurance covers you for medical needs.
Find out more at gov.uk.
If you are planning to take holidays in 2021, then buying an annual travel policy in 2020 could help you avoid paying more post-Brexit, according to MoneySuperMarket.
What about driving in the EU after Brexit?
Regardless of a deal or no deal Brexit, the chances are, you’ll need a green card to drive in the EU as of 1 January 2021.
The green card is a legal document that says you have the minimum motor insurance required by law, which you must carry with you when driving.
You may have to pay for the green card and it may take your insurance a month to issue one, so if you are planning a trip in the new year (assuming there are no restrictions in relation to the pandemic) then be sure to get in touch with your insurance company as soon as possible.
The green card will last for 90 days and risk a fine without it.
You can read more about green card requirements on the Association Of British Insurers website here.
Will my roaming prices be affected when using my mobile?
Since 2017, we’ve benefited from rules that allow us to make use of our UK data allowance when making calls and sending text to and from the EU. But this may change after Brexit, so get in touch with your mobile phone provider to find out about roaming charges.
EE, Three, O2 and Vodafone have all said they do not expect to change their roaming policies in 2021, regardless of the Brexit outcome.
The government has put legislation in place that caps unexpected roaming charges at £45 per monthly billing period. So, you can’t continue to use roaming services after that limit unless you choose to do so.
By law, providers must also send you notifications for when you are at 80% and 100% of your data usage.
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