How will your everyday banking, credit card fees and online shopping change?
The possibility that Britain could leave the European Union without a deal in March 2019 is “uncomfortably high,” according to Bank of England chief Mark Carney.
In a worse-case scenario, which Carney stressed was not a prediction but preparation, involves property prices going down by more than a third, interest rates going up by almost 4%, unemployment rising to 9% and the economy going into a 4% recession.
In January this year (2018), EU rules banned retailers from charging customers a fee to use Visa and Mastercard credit or debit cards. The UK also passed its own legislation which meant the surcharge ban is to stay for UK purchases. But following a no-deal Brexit could mean buying goods from the EU, or EU-based companies are no longer protected. European companies, including airlines and travel providers could re-introduce these charges and therefore increase the price for the UK customers.
If you are buying goods from the EU you could be hit with higher transaction costs.
In the UK many financial services regulations are drawn from EU legislation. If the UK loses access to these systems it’s likely to impact on banks’ access to the European payments infrastructure.
For you this means it could take longer to transfer money to Europe, or to pay for a purchase in euros. This could also be the case if you earn money from an EU-based company, you might experience issues when being paid.
There is an agreement known as “passporting” that allows European operators to offer services in other EU jurisdictions which UK banks and financial service providers benefit from.
The UK has agreed to extend passports to EU firms in the UK, therefore if your bank is EU-based it shall continue operating for up to 3 years. However the EU has not yet made this same offer.
This means if you live overseas but bank with a UK provider you might experience issues along with services being withdrawn.
There is a possibility of ex-pats losing access to lending, deposit or pension services. The only thing that is currently secured is your state pension. Following an agreement made in September 2017, between the UK and EU means your state pension will continue to increase at the same rate as if you lived in the UK.
Those affected by Brexit will need to be contacted by financial services and depending where you or your firm is based, the type of business and services you offer will impact how you are contacted. This can present a perfect opportunities for scammers to try and take advantage.
You should beware if contacted out of the blue via phone, email or text requesting personal details or if you’re pressured to respond quickly. If you are approached in this way we’d advise contacting your financial service provider using the official contact information on its website and ask them to verify the message you have received is genuine.
If the UK were to face a no-deal Brexit, consumers may not notice much change at all in the event, but could be shocked to learn the potential consequences down the line.
Who really knows for sure if we’ll be better off after Brexit… What is clear, is there will be negative effects should we leave the EU without a deal.
The Moneytree Corporation Limited Registered in England number: 4350758. Registered Address: 14 Gipsy Lane, Warminster, BA12 9LR. Savvy Financial Planning is the trading name of The MoneyTree Corporation Limited which is authorised and regulated by the Financial Conduct Authority. The Financial Conduct Authority does not regulate taxation and trust advice. We are entered on the FCA Register No: 504571 at www.fca.gov.uk/register. The information contained within the website is subject to the UK regulatory regime and is therefore primarily targeted at customers in the UK. The value of investments and income can go down as well as up and you may not get back the full amount invested. Should you have cause to complain, and you are not satisfied with our response to your complaint, you may be able to refer it to the Financial Ombudsman Service, which can be contacted as follows: The Financial Ombudsman Service, Exchange Tower, London, E14 9SR. Tel: 0800 023 4567 or 0300 123 9123, www.financial-ombudsman.org.uk.
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