How will Brexit affect your finances?
Here's a look at how Britain's departure from the EU could impact your finances.
Employment and benefits
Unemployment rates are down to 4.1% compared to 5% in February 2016. This suggests that Brexit has had little impact on job opportunities so far.
But the effect Brexit will have on UK employment and benefit payments is still speculative:
If the economy grows, employment opportunities and wages could go up and benefit payments would likely stay the same.
If the economy shrinks, unemployment could rise and wages may not keep up with the cost of inflation. Benefits payments may also be cut.
It will take at least two years for Britain to leave the EU from 29 March 2017, which is when article 50 was triggered. Any changes to unemployment or benefits payments will depend on the overall performance of the economy.
House prices
The Halifax House Price Index reports that house prices fell 0.4% between October 2018 and December 2018.
House prices are showing no signs of dropping too drastically yet; good news for existing homeowners, but less promising for first time buyers.
Is now a terrible time to buy a house?
Travel
Leaving the EU could impact the cost of your holidays and the level of consumer protection you enjoy abroad:
Flight prices: Britain will need to renegotiate air traffic regulation, as part of a revised trade agreement when it leaves the EU. This may mean that budget airlines up their prices to compensate for restrictions on travel routes, and the instability of the pound.
Travel money: The value of the pound against the euro has fluctuated since the Brexit vote, It's more important than ever to shop around to make sure you get the most for your money.
EHIC: The European Health Insurance Card (EHIC) gives UK citizens free or low-cost healthcare in other EU countries. This may be scrapped when Britain leaves the EU, and the cost of travel insurance could rise.
Flight delay compensation: If you face long flight delays, EU regulation currently entitles you to up to €600 compensation. After Brexit, there is no guarantee that these rights will still protect British travellers.
Mobile phone charges: The cost of using your mobile phone abroad could rise, as caps on roaming charges may not apply once Britain has left the EU.
Food shopping
The cost of your weekly food shop could go up, due to our reliance on food we import from EU countries and the weakening pound.
According to a study by mySupermarket, food prices increased at the end of last year, but were still 3% lower than they were in December 2015.
Here is how the price of essential groceries at Tesco were affected 12 months after the Brexit vote :
| Item | June 2016 | June 2017 |
|---|---|---|
| Pint of milk | 45p | 45p |
| Weetabix | £3.80 | £4.18 |
| Bread | 50p | 50p |
| Butter | 85p | £1.18 |
| Eggs | 89p | 89p |
| Cheese | £2.50 | £2.50 |
| Orange juice | 88p | 79p |
| Apples | £1.50 | £1.50 |
| Potatoes | £1.19 | £1.29 |
| Bacon | £3.00 | £3.50 |
| Whole chicken | £4.00 | £4.50 |
| Nescafé | £5.00 | £7.00 |
| Fairy liquid | £1.00 | £1.50 |
How much you pay for your weekly shop also depends on which supermarket you use. For example, Aldi and Lidl's prices look to remain unchanged because they stock a small range of products, and don't sell branded goods.
mySupermarket lets you compare average prices from the main UK supermarkets
Energy prices
Ofgem have put price caps in place for prepayment energy customers, but energy prices are still rising. The following energy providers announced price increases in March 2017:
npower standard dual up by 9.8%
Scottish Power standard duel fuel increased by 7.8%
EDF electricity prices went up by 8.4%
Switching your energy supplier ahead of price increases could help you save hundreds of pounds on your energy bills each year.
Fuel prices
The AA's Fuel Price Report shows that the price of fuel has increased since the Brexit vote.
The UK average in June was 111.6p per litre. It has now shot up to 121.7p per litre.
Smartphone apps like Waze can help you find the cheapest fuel prices in your area. Shopping around for your car insurance can also help you save money on the cost of running your car.
Savings
The Bank of England base rate at is currently at 0.75% compared to 0.25% after the vote, good news for interest rates on UK bank accounts.
Check the latest savings interest rates using our comparison. Fixed term accounts could give you a higher rate of interest, but they tie up your money for a fixed period of time.
What about stock market investments?
The pound's drop in value has boosted international investments.
However, brokers speculate that shares in UK businesses could drop because foreign traders are reluctant to invest in an unstable economy.
Hargreaves & Lansdown's Newsroom features regular stock market updates
Pensions
In 2016, Moneyfacts confirmed that existing pension funds saw their highest returns since 2009.
However, the Office for Budget Responsibility predicts that pensioners could be worse off over the next 5 years.
The Government's pension adviser has also warned that the state pension age may be pushed up by Brexit. If migration is greatly restricted, people in the UK may have to work into their mid-70s before they can retire.
Here is more information about how the state pension scheme works
About Salman Haqqi
Salman is our personal finance editor with over 10 years’ experience as a journalist. He has previously written for Finder and regularly provides his expert view on financial and consumer spending issues for local and national press such as The Express, Travel Daily, and The Daily Star.
View Salman Haqqi's full biography here or visit the money.co.uk press centre for our latest news.
About Salman Haqqi
Salman is our personal finance editor with over 10 years’ experience as a journalist. He has previously written for Finder and regularly provides his expert view on financial and consumer spending issues for local and national press.