Should I hold inheritance in Euros because of Brexit?

[BreakWindandFire]

I'm due to inherit around £50k in a couple of months. For me this is a life-changing amount. DH and I plan to buy our first property next year and this will be a great deposit. We don't plan to do it now, as we don't have guaranteed job security - once we are through the Brexit hump next March it should be OK and we can plan ahead.

Another reason not to buy is that we're in London and I suspect that there'll be a small drop in prices next year.

I'm wondering whether to put the inheritance into a euro bank account - HSBC does one, but any other recommendations are welcome. When I went on holiday last year I got 1.4 euros to the pound, now it's almost 1-1.

I don't want to do anything risky - if it's not being held in Euros it will probably go into NS&I accounts - I just want to hold the money in a stable currency until I need to use it.

Any advice appreciated.

No. That is a really bad idea. It us reasonable not to trust the pound (I don't) but not at all sensible to trust the euro ever, let alone now. In your place I would choose safe stocks. If you put your cash into a different currency you risk loosing money when you transfer back into pounds if the pound goes up or your chosen currency goes down more than the pound. Choosing stocks however protects you from currency fluctuations. You may also make some money if you choose a stick that goes up within your time frame.

No.

In theory the exchange rates and interest rates are linked such that you cannot gain like this.

www.tutorialspoint.com/international_finance/interest_rate_parity_model.htm

OK - thank you both for your response.

When I went on holiday last year I got 1.4 euros to the pound, now it's almost 1-1

No you didn't .

Euro rate dropped from about 1.23 to 1.13 the day the Brexit result was announced just over 2 years ago and it's hovered between about 1.08 and 1.18 ever since.

I wouldn't touch stocks if you are going to need your money back in the next few years either. If the price goes down and you need to sell, you've lost a lot of money.

I'd probably look for a fixed rate savings account, or put some in premium bonds, or even make your main current account Santander 123, to get 1.5% interest on upto £20k, which is hard to beat with instant access. If you are sure you aren't buying for more than a year, I think you can also get just over 2% on a year's fixed rate.

Basic advice would be to keep money in the currency you are planning to spend it in. So if you are planning to buy a house in the Euro zone then keep the money in Euros. If you are planning to buy in pounds then keep the money in sterling.

After the referendum we bought foreign currency including euros. We have used some of it and exchanged some back to pounds as and when needed - so far we are over £1-£2k better off. Slightly different situation because we do use the different currencies.