Brexit: Tips to help you stay on top of household finances
As the political uncertainty around Brexit continues, there has never been a better time to take stock and review your household finances.
The result of the EU referendum seemed to come as a shock for the majority of commentators and indeed for millions of voters across the UK. But what next? It might be prudent to review your household’s finances to see whether there are any adjustments, big or small, that can be made.
Here are 10 tips for homeowners who want to keep on top of their family finances:
1. Review your mortgage arrangements. Now that the Bank of England has cut interest rates, there will undoubtedly be competition between lenders to offer the most attractive mortgage deals. Shop around!
2. Conversely, if mortgage rates rise in the future, you should be wary, particularly if you are a mortgaged buy-to-let investor. “Any rise in interest rates would affect such investors, given the progressive reduction in tax relief they will get on their mortgage payments in the future,” says Lucian Cook, Head of Residential Research at Savills.
3. If you are still thinking of selling your home, your agent may well look abroad, as well as in the UK, for buyers. “The favourable exchange rate is likely to encourage international buyers,” says Nick Leeming, Chairman of Jackson-Stops & Staff.
4. Project Fear, as the Remain campaign became known during the referendum, warned that household bills such as gas and electricity would rise in the event of a vote for Brexit. Just scare-mongering or were they right? It is too early to tell, but if you make a conscious effort to reduce your gas and electricity usage this summer, you could cushion yourself against worst-case scenarios in the winter. In any event, it is best to use comparison sites such as MoneySavingExpert.com to compare your utility bills with what other offers are on the market.
5. Try not to increase your household debt this summer. With so much uncertainty in the pipeline, it is probably not the best time to buy a wildly expensive flat-screen TV.
6. If you have a share portfolio, now is the time to review it, investment by investment. Should you be off-loading shares or hold on until they increase again? Seek advice on what might be better long-term investments in these altered circumstances.
7. How has the vote for Brexit affected your pension? This is such a huge question, with so many ramifications, that it would be prudent to seek expert advice – perhaps in the autumn, when the political turbulence has settled.
8. Remember that the state pension, as well as any private pension, could be adversely affected by the issues around Brexit. Before the referendum, there was a so-called ‘triple lock’, guaranteeing the value of the state pension. But concerns have since been raised over whether the triple lock can be sustained in the event of an economic downturn.
9. Many experts are expecting fuel prices to rise because oil prices are quoted in US dollars and the pound has been falling since the outcome of the EU referendum. Should you start walking or cycling to work? It might be an option for those looking to save money.
10. If you own a holiday home abroad, you should also keep a close eye on what happens to sterling because of the impact on household costs.