After years of negotiations, Britain has finally left the EU. With ‘leave’ voters hoping it means new economic opportunities and those voting ‘remain’ apprehensive of financial fallout, what exactly does it all mean now that Brexit has happened and the dust is settling?
We take a look at the new UK trade deals and what the overarching effects of Brexit are likely to be for your own personal finances.
What’s on this page
- How has Brexit affected my finances?
- Important Brexit dates
- The effect of Brexit on cost of living
- What Brexit means for UK trade
- Registering for a Raisin UK account
How has Brexit affected my finances?
Unfortunately, this has become an impossible question to answer. Brexit, with its new economic era, would likely have made it clear to see how it directly affected your finances, but the impact of the global pandemic is likely overshadowing much of what is happening. With both things happening at the same time, measuring the impact of Brexit alone on personal finances isn’t possible.
How will Brexit affect European holidays?
One area where Brexit will have a strong impact is on European holidays. From the potential for roaming costs on mobile data to the new requirements for those travelling with pets, here’s a breakdown of things likely to change the way you holiday in Europe.
- Flight prices
As Britain has had to renegotiate air traffic regulation, budget airlines may increase prices to compensate. Whether this is the case or not is not entirely clear, due to the ongoing restrictions of the pandemic.
- Visa waiver fee (from 2022)
While the exact date has not yet been confirmed, a visa waiver fee of £6 will be applied to any holidays and trips of up to 90 days within a 180 day period. This is similar to the USA’s ESTA system and will remain valid for three years before a renewal is required.
- Currency fluctuations
As to be expected, there may be some uncertainty around the value of the pound, with hopeful holidaymakers wondering when is the best time for purchasing euros. This is entirely unpredictable, with the pandemic still wreaking havoc on the whole European economy.
- Travel with pets
Pre-Brexit, those wishing to travel with pets could simply equip their pets with a passport in order to travel in the EU. Now, pet owners will need to allow at least a month before travel in order to ensure an up-to-date rabies injection and the provision of an Animal Health Certificate from their vets.
- Taking your own car into the EU
While you were previously free to drive anywhere provided you had insurance, breakdown cover and other essentials such as beam deflectors, you will now need to obtain a green card from your insurers which may be subject to an admin fee. You will also require a GB sticker and the usual in-car essentials.
Brexit & banking: what’s changed?
While much of the legislation protecting consumer finances is based around EU legislation, important FSCS (Financial Services Compensation Scheme) protection will still continue. This means that up to £85,000 in your sole name per banking institution is protected should your banking institution fail.
If you bank with an EU bank that operates in the UK, you won’t need to worry about your finances due to the ‘temporary permissions regime’ put in place by the government, which allows banks to continue operating during this period. Many EU banks are obtaining UK licenses, which will mean that you benefit from the same FSCS protection. If you’re unsure whether you will be protected in the future, be sure to get in touch directly with your institution to check.
If you’re an expat with a UK bank account living in Europe, you may have been contacted by your bank to let you know that they will be closing your account or credit card. While some big name banks have refused to do this, it’s worth checking with your provider to see where you stand.
Important Brexit dates 2021
The previous dates made historic by the Brexit agreement include the 23rd June 2016, when it was revealed that 52% of voters chose to leave, and the 31st of January 2020 and 31st December 2020, when Britain officially withdrew from the EU and the transition period ended.
While the turmoil of the coronavirus pandemic has mostly overtaken the attention of British citizens, there are still some key dates to keep in mind regarding Brexit, including the following:
- 1st July 2021 – The ability to delay customs declarations and payment of import duty no longer applies. Any imports made from the EU into the UK after this date are subject to safety and security declarations.
- 30th July 2021 – This is the deadline for any EU nationals and their family members who have been living in the UK prior to 31st December 2020 to apply for status using the EU settlement scheme.
The effect of Brexit on energy prices
Energy UK, the trade association for the British energy industry, has said that there are two potential areas that could push up bills for UK households:
- A reduction in EU investment
- Leaving the EU Emission Trading System (EU ETS)
By leaving the EU internal energy market, Britain might face more expensive bills for bringing in energy via interconnectors that link the UK with France, Belgium, the Netherlands and Ireland. The EU Emission Trading System (EU ETS) is an EU-wide system that puts a price on carbon through trading of emission permits that the UK is no longer a part of.
The UK government has announced it will establish a domestic emissions trading scheme, previously stating that its own scheme will be more ambitious than the EU system in terms of reducing the cap on emissions allowed, and it could introduce a carbon tax. Again, such changes could lead to increases in our domestic bills.
To ensure a smooth transition, the UK has signed a Nuclear Cooperation Agreement with Euratom, the EU’s nuclear cooperation treaty, which took effect from 1st January 2021.
What Brexit means for UK trade
Thanks to the free trade deal between the UK and the EU that came into force on the 1st January 2021, trading won’t be subject to any tariffs or quotas, meaning the import of goods won’t be altered much from what it was, and won’t be any more expensive.
In fact, the UK has renegotiated many of its pre-existing trade deals with 63 of the 70 countries it had trade deals with prior to Brexit.
The first ‘new’ deal with Japan was signed on the 22nd October 2020 and is known as the UK-Japan Comprehensive Economic Partnership Agreement (CEPA), with a value of £31.6bn, or 2% of the UK’s entire trade.
The government has announced that they have applied to join a free trade area with 11 Asia and Pacific nations called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Separately, the UK is also in trade talks with the US, Australia and New Zealand.
Register for a Raisin UK Account
The best way to prepare for economic uncertainty is to safeguard your savings against fluctuating interest rates. A great way to ensure that your money is still working for you is to consider a savings account that is guaranteed to earn interest, such as a fixed rate bond.
By locking your money away in a fixed rate bond with Raisin UK, you’ll benefit from deposit protection and a fixed rate of interest that won’t change from the day you open the account until your term ends.
At Raisin UK, online banking is made easy thanks to a user-friendly dashboard which allows you to view all of your accounts with partner banks. If you want to quickly and easily apply for savings accounts with attractive rates from a range of UK partner banks, register for a Raisin UK Account and log in to apply today. Don’t forget that it’s free to open an account.