After the historic vote to leave the European Union was confirmed, many people began to wonder how it might affect them. Even now, the dust has not fully settled on the issue and the ramifications of the “Brexit” vote are still (and may be for some time yet) unknown.
We take a quick look at some of the main questions that this issue has brought to light.
Q – Will Brexit affect my mortgage payments?
A – If you’re on a fixed mortgage deal then the payments you make will stay the same until your deal ends. Borrowers who are on a Standard Variable Rate (SVR) are affected more by interest rate changes as this will affect the level of payments they have to make.
It could be prudent to switch to a fixed deal to keep the amount you pay the same every month (with a potential charge for doing that), but if interest rates go down, then you could miss out on lower mortgage payments too.
Q – Could Brexit affect my savings?
A – Like mortgage rates, savings rates are affected by interest rates – they can go up or down or stay the same. It is possible to switch your money to a fixed deal where the interest rate is safeguarded against potential rate changes.
Q – How safe ARE my savings?
A – After the referendum results were announced, some were concerned about the level of protection surrounding their money, but it is worth noting that the FSCS (Financial Services Compensation Scheme) protects savings of up to £75,000 per person per banking institution and there are no current plans to change this arrangement*.
Q – Will Brexit affect my investments?
A – Although likely to have an impact on markets in the near term, the result does not alter the fact that individuals need to provide for their future financial security. This is a guiding principle that always underpins the plans and strategies we discuss and put in place for our clients.
CHN maintain that clients need to take a long-term view to their investment planning, and we do not believe that the referendum result alters this approach.
If you want to discuss these matters further, or would like to arrange a no-obligation financial review, then call our Head Office on 0113 3878240.
*Information correct at July 2016