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Original poster

Is anyone moving their savings to Euros?

30 replies

Tawdrylocalbrouhaha · 07/02/2019 16:02

I am not a prepper or anything but it would go against the grain to watch my meagre but hard earned savings devalued by 50% hen Brexit occurs, so I am wondering about putting them into Euros or dollars.

Is anyone doing this, and if so how are you going about it? I would like to be holding only what is in my wallet in Sterling by the big day.

OP posts:
DadDadDad · 07/02/2019 16:55

So, is your plan to convert them back to sterling after Brexit? If you are right, then you could make a profit; but if you are wrong, commission and/or buy/sell spreads are going to erode your savings.

Original poster
Tawdrylocalbrouhaha · 07/02/2019 17:06

I would be planning to change it all back when things settle down - not looking to make a profit, just to mitigate a loss. I don't mind losing a slice on commission if it turns out to have been an unnecessary step. I think it would be worth it for peace of mind.

Bearing in mind Sterling has already slumped by a third, I don't want to watch my savings halved again in value and feel I should have avoided it. I just assume other currencies will be less badly hit.

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crosspelican · 07/02/2019 17:10

It depends on what you want to do with it. If you have the intention of moving to the eurozone in the future, it's no harm having your savings safely in euros before they become even more expensive to buy than they have over the last 2 years.

If you intend to remain based in the UK for the long term, it doesn't really make much difference.

There is the possibility of making some money on the transaction in the future though, yes. You can open a euro account in a UK bank you know - I have E150 in a euro bank account in Lloyds from when we moved to the UK 10 years ago. I use WorldFirst to move currency between EUR and GBP and they have great rates.

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Savings & investments
ivykaty44 · 07/02/2019 17:13

I’ve purchased euros to holiday with this year and US dollars to holiday with this year and next

I wouldn’t gamble savings on currency though and would plummet for gold sovereigns or the like, gold is reasonable low right now - £20 down so would be a good time to purchase

ivykaty44 · 07/02/2019 17:15

Incidentally I do know someone who makes money on currency - but I don’t know enough about it to feel confident myself in taking on this challenge

DadDadDad · 07/02/2019 17:16

Bearing in mind Sterling has already slumped by a third

But are you buying things sold in Euros? My spending is on items priced in sterling, and they haven't all risen dramatically in price, so it's meaningless to talk of my savings slumping a third in value. The pound I had three years ago still buys £1 of goods in the shops.

Of course, if sterling falls further and stays low, it will make imports more expensive adding to inflation, so a canny currency trade might offset that, but I can't see it being worth it after considering the costs, hassle and risk of getting it wrong.

Original poster
Tawdrylocalbrouhaha · 07/02/2019 17:21

Surely just keeping it in Sterling is just as much a gamble as changing it?

I am Irish and although I love London, I always have half a thought of moving back in the future. Mind you, even if I stay here, I think temporarily moving money abroad could avoid a plunge.

OP posts:
Original poster
Tawdrylocalbrouhaha · 07/02/2019 17:24

I'm not explaing well but, for example, anyone who moved their money out of Sterling before the Brexit vote, then moved it back a year later, would have protected their assets better (as it turned out - obviously different if remain had won).

OP posts:
DadDadDad · 07/02/2019 17:26

By the way, where do you get a slump of a third from? Just before the 2016 referendum, £1 was EUR1.27. Now it's EUR1.14, that's 10% down. Even going for a worst case, from the peak of EUR1.44 in July 2015 to low of EUR1.08 in Aug 2017, that's only down one quarter.

(all figures obtained from the Market Data page on BBC website)

DadDadDad · 07/02/2019 17:31

anyone who moved their money out of Sterling before the Brexit vote, then moved it back a year later, would have protected their assets better

Agreed, but that's the nature of investing - you can describe a brilliant strategy with hindsight! Anyone who bought shares in Facebook a decade ago who have an absolute fortune now, but obviously they didn't know that for sure at the time.

as it turned out - obviously different if remain had won
Exactly - investing in volatile assets carries risk: you could win, you could lose.

If long term, you might go to live in a Euro country, then it definitely makes sense to build up some of your long-term savings in Euros, but that's a bit different to taking a short-term bet.

Original poster
Tawdrylocalbrouhaha · 07/02/2019 17:33

Well in fairness my figures are a total guesstimate, based on what house I could currently afford in Dublin!

I'm interested to see others here are not considering it. I think I'll just ask my UK bank about setting up a Euro account, but won't use them for the actual exchange (if that's possible - it's fair to say I haven't a clue about all this. I just don't see Sterling going anywhere good during Brexit.)

OP posts:
Original poster
Tawdrylocalbrouhaha · 07/02/2019 17:36

Agreed, but that's the nature of investing - you can describe a brilliant strategy with hindsight

True! But whereas I didn't see the leave vote winning, and therefore don't regret taking action then, I DO see trouble ahead this time, and don't want to be kicking myself for being too lazy to sort something out when I knew I should...

OP posts:
CountFosco · 07/02/2019 17:38

After the vote we moved some of our long term savings to World stocks rather than just keeping everything in the UK. But I saw that as diversification to partially protect us from effects of Brexit. And not a crazy strategy whatever happens.

DadDadDad · 07/02/2019 17:40

There is a maxim in investing that you should not invest in anything you don't understand, so I hope at least this thread has given you some helpful things to think about. (I don't claim to know it all either, so I'll wait to see if others can offer an alternative view).

Original poster
Tawdrylocalbrouhaha · 07/02/2019 17:44

Well I can cheerfully admit to not understanding much about investments!

But...I feel as if keeping money in Sterling is just as much an investment choice as changing it.

OP posts:
MorbidlyObese · 07/02/2019 17:47

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nutellalove · 07/02/2019 17:49

Definitely not

larrygrylls · 07/02/2019 17:56

If you believe in efficient market theory, it is all already in the market. Personally, I think the 'risk' is GBP rallying after Brexit (or even more so if it fails to happen).

Are many speculators really long GBP now? I doubt it but suspect several are short. If it is anything other than horrendous, we will probably see a reflex rally in GBP.

If you have savings, you are probably best to diversify a little. However, if your cost are in GBP and you diversify, if GBP rallies, you will have less savings.

The FTSE 100 is already partially a hedge as so many of the companies earn income globally.

I would not touch gold with a very long barge pole. If anyone can justify why it should have any intrinsic value other than because it is pretty, I will be very surprised. Saying it is a 'store of value' does not make it so. And it pays no yield whatsoever....

SingingBabooshkaBadly · 07/02/2019 17:58

Tawdry I’ve recently opened a Euro account with a view to moving some savings into it. I don’t have any immediate plans travel to the eurozone (unfortunately!) but I fear high inflation and sterling devaluing after Brexit. My thinking is if the pound is lower and prices are higher I can switch some money back into sterling to, for example, buy groceries (assuming there are any to buy in the shops Hmm) and thereby hopefully mitigate some of the inevitable price increases.

I don’t know if it’s the right thing to do but, like you, I’m prepared that I might lose a little. By the way, I think I’m right in saying you can transfer between a Barclays Euro account and a Barclays sterling account without incurring any fees.

It’s all very worrying and so hard to know what the right thing to do is, especially when so much is out of out control.

DadDadDad · 07/02/2019 18:00

I'm intrigued why you say gold is reasonable. I see it's at around $1300 per oz which is close to the high it reached around the time of the 2016 referendum. And I note that by the end of 2016 it had fallen 17%. Your bet could be right, but it carries a lot of risk.

Also, places like the Royal Mint apply charges.

DadDadDad · 07/02/2019 18:05

If you believe in efficient market theory, it is all already in the market. Only if the market already has the information on whether a no-deal Brexit is going to happen, which it doesn't.

Obviously, as 29 March approaches, the probability of no-deal will increase or decrease and the market will move, so you are right that some of this will crystallise before 29 March itself. Presumably the big jumps will happen if a Commons vote is passed, or conversely we get confirmation that we will definitely be leaving without a deal, (or agreement to hold a referendum, or an extension of Article 50 - pick your scenario!).

ivykaty44 · 07/02/2019 19:04

Dadad why do you think gold carries a lot of risk?

ChardonnaysPrettySister · 07/02/2019 19:05

What savings?

ivykaty44 · 07/02/2019 19:06

After parliament rejected May proposals sterling went up, even though that pushes the country further towards a no deal Brexit

Passthecake30 · 07/02/2019 19:08

I've got half of my holiday spending money to hedge my bets.

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