Financial planning for no deal?

[SansaSnark]

Hi all, I'm a relatively long term poster who has been lurking on the Brexit forum and the Westminsterenders threads (place mat king and so on)- I've recently name changed. I've previously read some of the prepping threads, and have some good ideas as to how to survive/cope with the immediate aftermath of no deal.

However, I'm also currently saving for a house deposit, and I'm worried about the mid-to-long term effect of Brexit on my savings and investments.

I'm worried that if the pound massively crashes in value, or there's huge inflation, my savings will become effectively worthless. Is there any way to protect my savings from this? Should I be thinking about somehow saving some of the money as foreign currency? Is there a way I can do this, and still be sure of accessing the money if there's a no deal?

A proportion of my savings are in an NS&I bond which was tied up for three years and matures next summer. I can't access this money, so there's probably no point in worrying about it, but as these are government bonds, could no-deal brexit and a financial crash cause me to lose this money?

The rest of my savings I currently have easy access to, and in other political circumstances, I'd be looking to invest. At the moment, I'm just looking for a solution to protect this money in the medium term. I've literally thought about withdrawing a portion of the money and changing it into euros/dollars as cash- but this is a mad idea... right?

[probstimeforanewname]

If you open an account with Starling (very easy) you can also open a Euro account and simply transfer money across. But of course the exchange rate is rubbish at the moment. I had started transferring money but the rate has got worse and worse so it's not worth transferring anymore.

You could look at share ISAs - if you choose non UK funds eg European or worldwide trackers as an example you will avoid much of the exposure to the UK. But shares are always a risk.

Gold is an option but the price goes up as soon as sterling goes down...

[SansaSnark]

Thank you for the ideas- I'll definitely look at Starling account! I know the exchange rate is awful at the moment, but I can't really see the pound increasing in value in the short term, unless things change drastically!

I'm very wary of shares at the moment, although a worldwide tracker is something to consider. Although obviously no-deal will negatively impact the UK the most, I believe it will have a Europe wide impact, which could affect European shares in the short term!

[TellMeHowToFeel]

Sorry to hijack but what do people think should be done with more run of the mill levels of savings eg the stockpile for holidays and rainy days (more than 1k but less than 10k) as opposed to v large amounts intended for mortgages? Safe to remain in a savings account in UK banks or are we likely to end up losing everything?

[Janista]

Seriously...talking about losing all your savings in bank accounts.

This is hysteria, pure and simple. You need to calm down.

The banks and financial system have long ago planned for brexit and it won't make any difference to the security of the money in your bank savings account, Yes even in the now likely event of no deal.

[ourkidmolly]

Do nothing. There's no way to protect your cash and nothing will happen to it anyway. I'm a remainer but still, I'm not hugely concerned. The economy's downturn will not affect cash savings.

[Miljah]

Oh, janista. We are in uncharted waters.

A lot of stuff we believe couldn't happen -has.

Concern regarding crashing currency isn't hysterical any more.

[Janista]

The currency is likely to weaken for a period and then strengthen. This will have little day to day impact on people much like in 2016.

Possibly it may introduce a little inflation. Not necessarily a bad thing seeing as we have been trying to avoid deflation the last 10 years.

We've had 3 years of economic growth since 2016 and unemployment is the lowest it's been for 45 years.

The hysteria around brexit is laughable in a way but it is also very unfair on people who are easily frightened and worried and don't look at reality.

Brexit is not the stuff of nightmares many have built up (mostly remain politicians seeking retention of their future career paths).

In 12 months time you'll wonder what the fuss was about.

[Mistigri]

Use an ISA to buy a low-to-medium risk fund that invests in ex-U.K. interest bearing assets.

You could buy a FTSE 100 tracker if you are prepared to take a bit of a punt on equities. Most big companies earn lots of foreign currency so if sterling goes down, the FTSE often rises.

Do it through an ISA and you don't have to worry about tax implications. Having money in a euro account in a no deal Brexit is probably asking for future tax hassles.

[Lonelycrab]

The currency is likely to weaken for a period and then strengthen.

That is just your opinion. I think to state that is naive. No deal Brexit will be an unprecedented shock event on a leading world economy and I don’t think you, or anybody can say what will or won’t happen. To compare it to the previous global recession is not realistic.

In terms of saving a deposit to the op. I think you maybe are not in such a bad place. If prices accelerate downwards then cash will surely go further. I certainly can’t see property rising much now, or in fact anything increasing now.

[Miljah]

Hi, janista, how's the Australian dollar going against sterling, now.

Hmm?