Brexit – What Happens Next?

It is official; after many years of deal-making and breaking, House of Commons bickering and last-minute elections, the UK has finally kept its promise and left the European Union. On 31st January 2020, people flocked to the streets all over Europe to witness history, with UK and EU flags lowered across Europe.

The day of 1st February dawned on a new UK journey to a full withdrawal from the EU, from a single market, customs union and freedom of movement. Over the course of the following 12 months, citizens of the UK will experience very little change to their everyday habits, with the entire country in a limbo situation while the powers that be thrash out the finer details of full withdrawal and, hopefully, a deal to suit everyone. Effectively the UK will continue to follow the EU rules and regulations but have no say in them.

Sometimes it takes a monumental political shift to make people sit up and take stock of their finances, and Brexit is one such opportunity. Looking freshly at the different kinds of savings, pensions, insurance policies, and financial investments are essential now more than ever to take stock of what, if any, changes mean for such these different financial assets and how career and retirement goals may change with Brexit.

Pensions – at least over the course of the next 12 months, nothing much will change, rest assured pensions are protected both at home in the UK and many member states. If you are one of the lucky ones living in sunnier climates like Spain or Portugal, provided you have full legal residency in that EU country before the end of 2020 your pension has the continued protection from current EU regulations now and beyond withdrawal.

This protection applies to pension rates and any freezing or capping of pensions. For anyone relocating to an EU country post-Brexit 12-month transitionary period, these financial issues remain uncertain, and rules are subject to change, depending on where you live and any Brexit deal.  The likelihood is that any savings or insurance policies you have will be subject to the particular rules of the country you live in.

If your retirement is imminent and you hope to live in one of the EU countries, you may want to bring your plans forward and settle in your country of choice before any potential barriers arise. Post-Brexit, you will probably have to abide by each country’s stricter residency requirements.

Life Insurance – the best life insurance companies provide a list of precautions and advisory tips on how to protect your life insurance policies and premiums. Of course, the UK is still in Brexit turmoil while awaiting the result of further negotiations to secure a deal. The hard work commences averting the uncertainties of a no-deal scenario, hopefully.

In any event, the UK life insurance market remains a strong one, due to strict UK regulations in place. As a result, life insurance comes into its own as a crucial investment. We recommend life insurance as financial security for loved ones with cover to protect mortgage payments, debts, savings and funeral costs. Brexit has no implications on life insurance policies at home in the UK, only when planning to leave the UK to live abroad. As always, taking out cover when the individual is young and healthy keeps those life insurance premiums low.

Health Insurance – health insurance is a hot topic in the UK right now as a direct result of Brexit. It started with leaks about the future of the National Health Service and, very quickly,  people began looking at private medical insurance. The Government has gone to great pains to alleviate worries about the NHS, but still, the attraction of private medical insurance gains momentum. Again, for those worried, private medical insurance is an affordable option for many people, and the benefits gained are appealing, including advanced treatment options, less waiting times and improved hospital facilities.

Overall, despite fears of a no-deal Brexit at the end of 2020, there is a definite feeling that excellent opportunities exist for future financial planning and investment. We always advocate consulting experienced advisors for any future overseas investment, to spread any risk and diversify where necessary, especially in light of fluctuating exchange rates. For new ventures, the general advice by advisors is to wait until the transitionary period ends.

At home, and across the European Union, there will be little change as regards living, working and travelling for the next 12 months. The only notable point is the value of the pound and its fluctuations. However, compared to 2016 and the referendum result, sterling has gathered strength. Until we have a conclusive future deal, the pound will continue on a volatile journey. The UK Government are working hard towards a deal that promotes a healthy UK economy, and we are confident that this sensitive situation will remedy itself once we have certainty in future trading agreements.

The vital reminder is think ahead to post-2020 and take on board the uncertainties we are experiencing today. We are keeping an ear to the ground with regards to post-transition discussions, and we will endeavour to keep our readers up to date with any notable bureaucratic requirements and any financial and administrative issues that come to light.

One financial aspect not in jeopardy due to Brexit is life insurance, your policy remains safe with our trusted team of life insurance experts and you can get advice, a quote or an update to an existing policy via our easy to use form.

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