With just six months to go until the UK leaves the European Union, there are still scant details about just what our relationship with the EU will look like in the years to come. Indeed, the chances of a ‘no deal’ Brexit appear to be growing by the day.
What would that mean for your own finances? And is there anything you can do now to Brexit-proof your cash?
The value of the pound recently dropped to its lowest level of the year against the dollar and the euro, and there have been warnings that it will drop further if there isn’t a deal with the EU ahead of ‘Brexit day’ on 29th March 2019.
So if you’re planning on heading overseas next summer - whether to the EU or further afield - it’s not the worst idea in the world to get your holiday money sorted now.
Remember, if you want to get a good deal on foreign currency you’re much better off going to a specialist bureau rather than using a high street bank or the Post Office.
What about my holidays?
That said, there remain question marks over how you will actually get to your holiday destination.
New warning notices from the government about a no-deal Brexit have included the fact that our airlines would lose the right to land in EU states, and vice versa. The government has said that it will unilaterally allow EU airlines to travel here and expects European nations to do the same, but there’s no guarantee that will happen.
The prospects of a hard Brexit have got some car insurers concerned that it will bring with it the return of the ‘green card’ to prove that you have insurance, which hasn’t been required for decades.
As the AA pointed out, seven million drivers head from the UK into Europe every year. If they always needed to get a green card from their insurer, that would mean a significant increase in admin costs for insurers, and that is only likely to be passed onto you and me.
We don’t know precisely what Brexit will mean for the value of the stock market, so ensuring that your portfolio is diversified is a smart move. If you spread your investments across a range of areas, it means that should one area go through a tough time, that should be balanced out by the rest of your investments.
With things likely to be volatile, you might want to move more of your portfolio into safer and steadier investments for a little while as well.
Interest rates were raised in August to 0.75%, only the second time the base rate has been increased in the last decade. Now Mark Carney, the governor of the Bank of England, has hinted that further increases may be needed in the event of a no-deal Brexit.
Banks and building societies don’t tend to waste much time in passing on rate increases to mortgage borrowers, though this only has a direct impact on people with variable rate mortgage deals.
That said, if you are coming to the end of a fixed rate deal and thinking about remortgaging, it might be a good idea to act sooner rather than later as rates remain at historically very low levels. This way you could snap up a cheap deal for a lengthy fixed period.
A rate rise should be good news for savers, but in truth many savings providers drag their feet when it comes to passing on rate rises to their savers.
Indeed, research by financial information site Moneyfacts found that at the start of September, a month after the base rate rise, seven of the ten biggest banks had failed to pass on the 0.25% rate rise in full to their savers.
Energy UK, the industry’s trade body, has warned that Brexit could push up energy bills. Currently we import around 5% of our electricity and 12% of our gas from the EU. However, if we cut our ties with the EU’s internal energy market, it will likely mean that the prices we end up paying will rise.
This is a good time of year to start thinking about energy bills anyway, as the falling temperatures mean we start to use the heating far more often. We have also seen a host of suppliers announcing price rises of late.
By going for a fixed tariff, you can lock in the price you pay for your energy for years at a time.
Not only are these tariffs cheaper than the standard tariffs that millions of homes are on, they are also a great way to protect yourself from future price rises as your bill is essentially locked in until the end of the tariff.