What would a plan without Brexit mean for your personal finances?

No deal on Brexit means that Britain will regain control over its financial services - but are there costs?

With seven months to go until the B-day, tensions between politicians are increasing everywhere in parliament and they are wondering whether it is likely to reach a satisfactory deal for Brexit.

While the negotiators continue to fight each other, the British government has also admitted that it is preparing for the possibility that the UK will crash from the EU next March with little or no agreement on trade with the rest of Europe.

As part of this preparation, the publication of 25 positioning documents was published last month detailing the no-deal Brexit effect on a range of sectors, from nuclear research funding and the treatment of organically produced food to the storage of pharmaceuticals.

Among these documents – the first of many to appear in the coming weeks – was a guideline for all financial services companies active in the UK and UK companies active in the European Economic Area.

No deal on Brexit means that Britain will regain control over its financial services - but are there costs?

No deal on Brexit means that Britain will regain control over its financial services – but are there costs?

It is full and full of jargon, but that does not mean that it is not full of essential information for every person with a mortgage, pension or savings account in the UK.

To help you determine how you might be affected, This is Money has brought together the foundation for what Brexit would never mean for your personal finances.

Who would suffer from no-deal?

The government has said that European companies offering a service to customers based in the United Kingdom can continue to do so after 29 March 2019. British companies that offer services to British customers will continue to do so under British law.

Most laws that affect financial services in the UK will remain virtually the same as European legislation at the moment. Where a British company provides services to EU-based customers – whether they are British expats or not – they May to be able to continue doing this after Brexit.

Their ability to do this will depend on two things.

1. If the EU agrees to leave them, nothing will change. Currently, the EU has not agreed to this.

2. If they establish an EU-based subsidiary, they may continue to offer these services to European customers on the basis of European law.

But this can be complicated if EU countries decide that they do not appreciate this approach.

If none of these things were agreed on March 29, customers located in the EU will not have access to the services of UK based companies.

Customers in the UK using financial services from a European company may also experience problems if there is no deal, but not immediately.

There is a grace period of three years starting on 29 March 2019, during which EU providers of financial services to UK customers can continue to provide them legally without direct permission from the UK regulators.

During this time, they are expected to apply for and receive British authorization (hopefully). So for these customers there should be no change.

The Bank of England: Philip Hammond has warned that no deal can mean that Treasury must borrow an additional £ 80 billion to support the British economy after Brexit

The Bank of England: Philip Hammond has warned that no deal can mean that Treasury must borrow an additional £ 80 billion to support the British economy after Brexit

The Bank of England: Philip Hammond has warned that no deal can mean that Treasury must borrow an additional £ 80 billion to support the British economy after Brexit

After the publication of these documents, Federal Chancellor Philip Hammond immediately warned that no deal on Brexit could wipe out up to 10 percent of British national income.

He also said that it & # 39; big tax consequences & # 39; would have for Great Britain and could give an additional £ 80 billion in loans. Theresa could quickly reject his predictions and stressed that no deal the end of the world & # 39; would be.

The official analysis is: "The UK is an important investment banking center in Europe, with UK investment banks offering investment services and capital markets financing to business customers across the EU.

"In the absence of EU action to conclude an agreement, EEA customers will no longer be able to use the services of UK-based investment banks, and UK-based investment banks may not be able to to carry out cross-border contracts. "

This is not just the case for investment banks. Pension providers, insurance companies and personal banking services will all be in the same position.

Britain clearly wants to halt the provision of its banking services in Europe, but the government still needs European negotiators to agree that UK operators are trading with European companies as they currently do to achieve it.

Companies are already preparing for no deal

As a result – and regardless of a deal – many UK financial service providers currently active in Europe are already taking independent steps to ensure that they can continue after their departure.

The most obvious way is to set up a new EU-accredited subsidiary.

This would allow the UK company to offer new services after exit through this subsidiary, and in some cases existing contracts could be transferred to the new entity.

What does no deal mean to investors?

It is technically possible that some European companies and investors are not legally allowed to trade on British markets

It is technically possible that some European companies and investors are not legally allowed to trade on British markets

It is technically possible that some European companies and investors are not legally allowed to trade on British markets

At present, European customers and companies can trade shares and derivatives at any market place designated by the EU.

But in a no-deal scenario, trading venues established in the UK will no longer be EU-approved.

This means that it is technically possible that some European companies and investors are not legally allowed to trade on British markets such as the London Stock Exchange.

This is because individual European countries have their own laws that prescribe where their citizens and businesses can trade.

It is important for both the UK and Europe, as the UK is currently home to many markets that do not exist elsewhere in the EU. So if there is no deal, both European and British markets can be disrupted.

No deal can also have implications for individual investors.

UK companies offering investment services in the European Economic Area may have to stop on 29 March, causing obvious problems for EU-based investors who may lose access to their accounts until agreement has been reached.

But it can also cause problems for British investors. This is because, according to EU law, it is possible for UK fund managers to delegate portfolio management services to a third party in another country.

If your fund manager delegates to an EU-based servicer, your account may be affected by a no-deal. In extreme cases, this could mean that UK investors may lose access to their accounts until a solution is found.

The British Secretary of State for Leaving the European Union Dominic Raab has announced the planning position of the government in the event that no agreement is reached on Brexit last month

The British Secretary of State for Leaving the European Union Dominic Raab has announced the planning position of the government in the event that no agreement is reached on Brexit last month

The British Secretary of State for Leaving the European Union Dominic Raab has announced the planning position of the government in the event that no agreement is reached on Brexit last month

The government has warned that unless Europe concludes an agreement, the hands of Britain will be tied when it comes to funds and managers that are permitted under certain EU legislation.

They have told asset managers to plan on the basis of a deal, but they have also raised the possibility that the EU can confirm that it is not the intention to implement the legislation necessary to enable UK companies to operate. Europe in the same way as other non-EU countries.

What does nothing mean for pensions?

Britons living in the EU may struggle to receive their UK annuity payments if there is no deal

Britons living in the EU may struggle to receive their UK annuity payments if there is no deal

Britons living in the EU may struggle to receive their UK annuity payments if there is no deal

The government has admitted that British expats living in the EU may not have access to financial services from British providers that do not have an outpost in Europe if there is no deal before March 29, 2019.

It depends on the country in which they live. For example, France, Spain and Luxembourg have already said independently that British companies can pay pensions to existing customers who live there.

Britons who live in EU countries and do not have an independent agreement and who collect their annuities from a British supplier may no longer be able to receive them because the company will violate European law to continue to give it to them.

They will also violate British law by not continuing to provide it.

This is the worst scenario and the British government has said that it is doing everything it can to work with EU negotiators to prevent this result.

But simply put, there is still no confirmation from Europe that it is prepared to allow financial service providers in the United Kingdom to continue offering their services in the European Economic Area after Brexit unless they also have a subsidiary on the continent.

>> Read more about how expat pensioners could be influenced in a no-deal scenario

What does nothing mean for mortgages?

Most homeowners in the UK have mortgages with British lenders.

So even if there is no deal, there would be no change for them. However, domino effects may occur on the price of mortgages in the future.

As explained above, if companies and individuals find it difficult to trade as they do now due to post-Brexit restrictions, this could put the funding of British lenders under pressure.

Banks and mortgage banks borrow money in various ways to be able to lend mortgages.

They take savings deposits, they get funding from the Bank of England and they lend money from each other on the money markets & # 39 ;.

The costs for such loans depend on various factors, but how much money is available to borrow – liquidity – is one of the most important.

This is the bit of the government document that is relevant here: "Without EU action, when the UK leaves the EU, trading platforms in the UK would no longer qualify as trading platforms in the EU.

& # 39; This means that companies may not be allowed to be members of UK locations under their national laws. Locations in the UK will also not be suitable locations for companies to execute certain share and derivative transactions.

& # 39; This may prevent companies from trading in certain derivatives, while no alternative location is available in the EU. This would reduce market liquidity in the UK and the EU. & # 39;

Apart from these posing problems for investors, this would mean that the available money pool for British banks would shrink; they would no longer be able to exchange certain financing instruments with EU banks.

Roughly speaking, that means that the cost of money will go up and that banks and construction companies that depend on this form of financing will increase their mortgage interest rates.

This also applies to landlords with a buy-to-let mortgage. Their costs will rise and it is likely that they will ask for more rent to cover them.

What does nothing mean for savings?

If your savings are in a British bank or a constructive society, you should not see anything else change. If they are with a provider in the EU and do not have a subsidiary in the United Kingdom, you have to keep an eye on things.

Savers with European accounts may notice that they are no longer protected by the FSCS

Savers with European accounts may notice that they are no longer protected by the FSCS

Savers with European accounts may notice that they are no longer protected by the FSCS

The UK's energy savings network, the compensation scheme for financial services, protects the money that customers of companies approved by the UK hold when companies fail, including some products from EEA companies.

However, for conservation savings in those EEA offices, protection rights under the FSCS are not yet clear.

The government has said that supervisors will consult this year on schemes for coverage to continue.

What does nothing mean for spending in Europe?

The government was most explicit about this in the newspapers.

If there is no deal with the Brexit, it is more expensive to use your credit or debit cards in the EU.

This is due to the complex payment and clearing system that lies behind us, plastic expenses.

UK payment providers work with our banks, construction companies and credit card providers to make payment transfers for a certain price.

Currently these costs are regulated by different laws in Europe.

If there is no deal, these laws do not apply, so the costs are likely to rise because there is no law to prevent providers from charging more to UK customers.

The government would like to avoid this, but it is really up to Europe what happens next.

So we must prepare for no deal?

The government has very much emphasized that we must assume that there will be a deal. In fact, it signs this document by saying: & # 39; This notice is only intended as a guide.

EU head Brexit negotiator Michel Barnier (right) and the British secretary of state for leaving the European Union (Brexit minister) Dominic Raab (left) are still stuck in discussions to reach an agreement

EU head Brexit negotiator Michel Barnier (right) and the British secretary of state for leaving the European Union (Brexit minister) Dominic Raab (left) are still stuck in discussions to reach an agreement

EU head Brexit negotiator Michel Barnier (right) and the British secretary of state for leaving the European Union (Brexit minister) Dominic Raab (left) are still stuck in discussions to reach an agreement

The government is very clear about its position on this. Pretend to have a deal.

& # 39; Consider whether you need professional advice separately before making specific preparations.

& # 39; It is part of the government's current planning program for all possible outcomes.

We expect to negotiate a successful deal with the EU. & # 39;

The reality is that with so little certainty about what a deal will ultimately look like, it is very difficult to plan in advance.

But there are some basic steps that can minimize possible damage. We have put together our best tips below:

FIVE WAYS TO PROTECT YOUR MONEY IN A NO DEAL SCENARIO

1. If your current account is with a European bank, it might be a good idea to open another account with a UK-based provider so that you know that you have cash access to your cash.

2. If you have doubts about when to pay again, do not delay it. Mortgage rates are extremely low at the moment and you will probably save money. Leaving it to see if they fall further is a gamble.

3. If you are not sure whether your provider is based in Europe or has a subsidiary based in the United Kingdom, you can contact them directly. If the latter is the case, your accounts will not be affected by a deal.

4. If you are a UK expat and live in the EU and you are worried about your UK pension, any UK insurance policies or loans you may have, you need to keep a close eye on how the negotiations are progressing. Check how your suppliers work and whether they have an EU-based subsidiary.

5. As always the same advice applies today as in the seven months in which the Brexit finally comes: if you make a major financial decision, then do your research and consider obtaining financial advice from a fully regulated market advisor.

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