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Brexit: what are your financial concerns?

Brexit EU referendum flag

Last week the UK voted to leave the EU. Whatever your views on Brexit, it’s clear that we’re set for a period of uncertainty when it comes to our personal finances.

We’ve set out the main ways that the vote to leave the EU might affect your wallet, but it’s clear that definitive answers about what will happen may be hard to come by, at least in the short term.

Brexit and interest rates

Savers face uncertain times when it comes to their interest rates. The Bank of England (BoE) base rate has been stuck at a record low 0.5% since 2008, in order to encourage banks to lend and boost the economy. Now, with fears about a possible recession, the Bank may cut the rate to 0.25% or even 0%.

The Governor of the BoE, Mark Carney, stated in his speech on the morning after the referendum that the Bank would consider ‘any additional policy responses’. It’s thought that the first rate cut may happen in August, but this is purely speculation.

The logic of lower interest rates is to make it cheaper to borrow money, which in turn will make people more likely to spend, boosting the economy. This would mean more bad news for savers, but better news for homeowners and those in the market for a mortgage.

Beyond the immediate term, it’s possible that interest rates could start to rise, especially if inflation becomes a concern. It’s thought that inflation may become a problem as the result of a weaker British pound, which could lead to increased prices from the supermarket to the petrol pump.

Uncertain times for investors

Investors, including anyone with a pension invested in the stock market, face a period of uncertainty. And since stock markets hate uncertainty, investors should expect big swings in prices over the coming months.

The FTSE 100 index, which is made up of large, often multi-national companies with earnings around the world, fell substantially in the immediate aftermath of the referendum vote, although it has since bounced back to an extent. The FTSE 250, which is made up of mostly medium-sized and domestically-focused companies, fell more dramatically. At the time of writing the FTSE 250 has also recovered some ground, but is still down by more than 10% since the start of 2016.

However, long term investors with balanced portfolios should be well placed to ride out the storm. And if interest rates are cut you would usually expect shares to go up, all else being equal, as frustrated cash investors seek better returns from riskier assets. The Chancellor George Osborne, following Mark Carney’s lead, has sought to reassure the markets about the strength of the UK economy.

Homeowners post EU referendum

And homeowners may face a less rosy outlook than they’ve become accustomed to, with speculation about the impact the wider economic climate might have on the property market. It’s possible that the market will slow down, as buyers decide to wait and see what happens to asking prices. On the other hand, lower mortgage rates could stimulate demand.

Your Brexit concerns

Which? is committed to helping you with the difficult questions you might face following the UK’s vote to leave the EU. And as negotiations to leave the EU develop, we will work with the government to ensure that the consumer voice is heard and important rights are protected.

Our Which? Money Helpline experts have fielded some Brexit questions since the result of last week’s EU referendum. Some callers have been concerned about their pensions; others wanted to find out whether their savings were safe. We’ve also heard from concerned homebuyers.

We’ll be covering all these issues in Which? Money magazine and on Which.co.uk in the coming weeks and months. We also want to hear what you’re most concerned about here on Which? Conversation.

Will you be making any changes to your personal finances following the EU referendum results? Are there any consumer issues related to Brexit that are worrying you, whether personal finance or not?

Comments
Member

I am most concerned that the referendum has split the nation.

Member

Ah yes ! wavechange it certainly has and skirting round it as in -if we dontb talk about it it will go away wont work as the Scots feel they have been unjustly treated due to the 2014 Referendum in which cameron said –and I quote- if you (the Scots ) leave then you will be kicked out of the EU and guess what they are being kicked out of the EU ,by ,in their eyes , dis enfranchment due to the voting imbalance . It was made clear this was an incentive to start Independence MK 2 . As you all know Scotland is Left wing leaning ,always was they dont mind being taxed on the NHS and other social areas unlike England , funnily enough it has attracted a large number of people from England moving to Scotland due to the better welfare services , free university,prescriptions etc etc . The polls put a majority for leaving the UK now . Now the usual outpouring from England is- get rid and a lot worse on news websites but Which being a bit more intellectual I would like to hear a reasoned response and please keep it civil !

Member

I’ve only just just stopped dancing in the street, after campaigning for over twenty years to get us out! Having no wish to live in the USSR, I had no desire for my children or grandchildren to grow up nor myself grow old in the EUSSR under the corrupt, undemocratic and unreformable politbureau that is the European Commision.
And yes, the referendum has proved (if proof was needed) this is a divided country; if you want to divide it even further, hold another referendum – if the result had gone 4% the other way what chance do you think the Leave side would have got to have a re-reun to see if they could fiddle the result?

Member

Do love hearing from such well-informed and open-minded people such as yourself. Just a shame that you’re wrong, really.

But your comment is completely off topic. The question was “what are your financial concerns?”. I assume the fact that the pound plunged to a 31 year low won’t concern you? Because it should, since oil is priced in dollars…

Member

Hi, yes it would be great to stay on the topic of financial concerns. I will be honest that we tweaked the title to make this topic clearer, so I apologise if it wasn’t clear before.

Any concerns related to other consumer issues are also fine, as per the two questions from Harry at the end:

“Will you be making any changes to your personal finances following the EU referendum results? Are there any consumer issues related to Brexit that are worrying you, whether personal finance or not?”

Member
Jeannette Greaves-Smith says:
29 June 2016

Sorry Ian, it has now inched back up as has the stock market and shares. It was the day after that it dropped to an all time low. I hope you remember Black Wednesday and John Majors blunder. We survived that and we can survive the future as a country away from the EU.
We have been a great nation for thousands of years , we have only been a part of the EU for just over 40 years so, I am ready to look forward to a future once again as a sovereign Country not as a disfunctioning EU which is collapsing around its ears. I also see you show your Flag of Scotland on your post if most of the Scottish people are so in love with the EU then why do you not fly the EU flag with the same pride. Nicola Sturgeon is making a fool of herself and the Scottish people in my opinion by begging the EU to let them stay which is nauseating to watch. I am flying my English flag with pride from now on. PS hope the Scottish People do not get upset when we change the Barnet Formula which give the Scottish people Free University Education, free Prescriptions unlike we English people , maybe the EU will have something similar to the Barnet Formula, my guess is you will have to pay a high price for it though.

PS Ian, most commodities and trade is priced in dollars . I own my own Transport and Logistics company and have been working with Imports and Exports for most of my working life. I have dealt with Tariff rates before the single European Market and customs and Excise so should know a little about the markets and free movements. We can now start trading on the world markets and our commonwealth countries again with no EU intrusion or sanctions stopping us Simple.
If we have to leave the single market then we will take that hurdle in our stride.
PS, I really do not think the EU want you without the rest of the UK/ England. I would be surprised, you are not large enough or rich enough as a country for them. Ps I love Scotland and after the Lake District and Dales it is my favourite place to holiday especially Skiing. I would end with the comment I have no worries about the British economy outside of the EU it can only get better . It bwill take a little time to adjust . SIMPLE

[Sorry Jeannette, your comment has been tweaked to align with our Community Guidelines. Thanks, mods]

Member

Hello Jeanette, I know that this could be a very heated debate and it’s all too tempting. But we’re really keen to hear people’s concerns (if any) about personal finance issues and Brexit, so in the interests of keeping a healthy discussion going can I please ask that we all avoid the urge to turning this into a Leave/Remain debate. Thank you