Pound crash-Should I open an account in different currency?

[BookishKitten]

Hi, MN!
With the recent pound crash I’m seriously considering an account in a different currency.
WWYD?
I’d be looking to put a proportion of my savings there. I’ve checked with my bank and I could do it in euros or dollars, and I could access it in pretty much the same way as money in an ISA.
Anyone else thinking of this or has done so?

The cons would be that I’d pay tax on it which I don’t with an ISA, and I think the rates are lower as well. At the moment I get about £9 in Interest per month which isn’t much but at least is tax free....

Thanks!

The exchange rate you’d pay at a bank means you’d not make much. Currency trading is very very risky

It could pay off, but you could also lose out big style as well. If you put in £10000 now, it would be worth about 11 000 euro, but if the pound got stronger again - the exchange rate has been as high as almost 1.5, that 11 000 euro would only be worth £7333 if you needed to convert it back while the pound is strong.

Just not worth the bother.

Hi, thanks! It’s not a case of currency trading but more future proofing. I’m really worried about the pound falling yet again and staying low for a long time. I’ve worked really hard to build up some savings and now to see it eaten up by inflation and pound depreciation is frustrating. I know we’re all in the same boat but our household is mixed, British and EU, and if one of us loses their job or can get a better offer abroad we might consider leaving.

I don’t know if you saw C4 News the other night, an economist was saying that no economist thinks that the pound won’t further “punched in the face” (her words)...

I really appreciate your input. Thanks!

Exchange rates can be pretty risky. As explained above, you could be really out of pocket if the exchange rates go the other way.

Moving abroad is irrelevant. Say you put that £10k, or 11k euro into a bank. If the rates go the wrong way as BarbaraofSeville explained, you will still have your 11k + interest in the account. However, if you were to have savings in £ and convert in the future, you’d have 15k euro so you’d be out of pocket regardless.

For something a bit more predictable, you could consider a stock and shares ISA.

I think Forex trading would be more suited to what you have in mind. It is a form of gambling though, so there is risk.