Sun 26 Jun 2016 View all news articles
Money saving expert Martin Lewis said the EU referendum result would lead to a “very different Britain” but urged people to “work together to ensure it’s for the better.”
Before the result, he had compared voting for Brexit to gambling your cash on the stock market. Voting Remain was more like saving - with less chance of huge returns, but less risk of losing your money.
Now he has provided a detailed rundown of how people’s personal finances are likely to be affected by the vote to leave the EU .
1) “Sentiment changes.” Martin advises that the most important thing to do when it comes to financial decisions is to act as normal.
2) “Government changes.” Again, he stresses that little is likely to change in the area of personal finance.
3) “Rule and trade changes.” Martin said: “The UK has not left the EU. For that to happen, the Government almost certainly has to enact Article 50 of the Treaty of Lisbon. David Cameron has said he won’t do this, so it’ll be for the new Prime Minister in October – and even when that happens, there is a two-year negotiating period.
“That means all existing rules and regulations that derive from our membership of the European Union currently remain unchanged due to the vote. And they’re likely to remain that way for two years and quite possibly longer.”
4) Interest rates. Martin says that “interest rates will remain roughly similar to as they are now, or perhaps be cut a touch if things go wrong.” But he admits “this is an ever-changing scenario.”
5) Mortgage rates. “Overall, I suspect little change for now – and it’s worth remembering UK mortgage rates are at all-time lows anyway. So it’s worth investigating if you can cut the cost of your mortgage rate now with a cheap remortgage.”
6) What is going to happen to house prices – is it worth me completing my purchase? “A number of people have been asking if they should complete on the house they’re in the process of buying. If it’s the house that’s right for you, it’s within your budget and you’ve got a decent mortgage that you can afford, then I think the best human decision, if not financial, is to carry on and go for it.”
7) Are my savings safe? “UK banks and building societies are required to have much bigger capital reserves now than they did in 2007. Plus there a variety of new measures in place to prevent savings collapse.”
8) Has my private pension lost money due to the drop in the FTSE? “If your pension isn’t being cashed in today, it’s just a paper loss. The markets move every day. It’s only when you crystallise that by buying or selling that there is an actual impact.”
9) What will happen to the state pension? “For now the state pension stays the same. Whether there’ll be any change to it is a question of policy for future Governments, but there’s nothing definite planned currently.
10) Will there be changes to my benefits? “Benefits are unlikely to be directly impacted by the vote to leave the EU. However, it is of course possible that a new Government will have a different stance on benefits and make changes when it comes in.”
Source: Liverpool Echo
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