Holidays, wages and mobile phone calls: How leaving the EU will affect your wallet
Your Brexit questions answered in our handy guide to the financial impact of the referendum result
SO a new independent Britain is dawning as the UK prepares to leave the EU.
But what will it mean for your personal finances?
Will your holidays cost more? Is your pension going to be affected?
We are about to enter uncharted water in UK finances and there are plenty of questions that need answering.
So here is your guide to the likely effect of the Brexit on your wallet.
The Pound
The value of sterling dropped by ten per cent on news of the referendum result which, in the short term means that buying goods or services from other countries will become more expensive and other countries will be able to buy from us at a cheaper rate.
As a result, inflation is likely to rise.
However, the pound could rally once the effect of Brexit on the Euro is taken into account.
Will it affect the cost of my holiday?
David Cameron claimed a family holiday would go up by £230, but is he right?
A fall in the value of the pound could mean the price of holidays abroad would go up - but don't panic, it's not yet clear if this will happen.
In the short term, accommodation could cost more and the price of a beer in the Eurozone could set you back a bit more.
In terms of flights, easyJet and Ryanair have claimed flights will become more expensive because of aviation rules. But IAG, the owner of British Airways, said UK exit from the EU would not affect its business.
Will calls abroad cost more?
EU caps on mobile roaming charges have been keeping costs down for mobile phone users but these will no longer apply.
It will be up to the UK government to decide whether they introduce their own legislation to stop mobile companies overcharging.
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Will wages drop?
The remain campaign claimed unemployment will rise and the Treasury predicted wages would fall by up to four per cent.
A typical worker would therefore be £780 worse off.
But there is no guarantee they are right as we will still be in the EU for two years and leading economists admit that predicting the job market in two years’ time is virtually impossible.
Will my mortgage or rent rise?
Interest rates have been at an all-time low for years but the fall in the pound is likely to mean the Bank of England will push up interest rates.
The cost of borrowing may rise by 0.7 per cent to 1.1 per cent and as landlords' costs would increase, rents would also shoot up.
However, if the shock to the economy is too severe the Bank of England might have to consider a cut in rates.
How will Brexit affect benefit payments?
If the economy slows down, as the Remain campaign suggests, the income the government receives from taxes will drop.
The shortfall is estimated at between £28billion and £44billion by 2019-2202
This means they may opt for more cuts to save money, or higher taxes to raise more.
Welfare accounts for 28 per cent of Treasury spending so benefits could be hit hard.
A report by the (Niesr) said some families could lose as much as £2,771 a year.
But again, the predictions could prove very wrong as future trade agreements could help the economy stay on an even keel.
Will house prices rise or fall?
It’s good news for first time buyers who are struggling to get on the property ladder.
The Treasury claimed house prices could be hit by between ten per cent and 18 per cent over the next two years, meaning it will be easier to buy.
House prices in London are likely to take the biggest hit, losing and average of £7,500 in three years, according to National Association of Estate Agents.
The average outside London is will be around £2,300.
But it all depends on the Bank Of England’s stance on interest rates.
Will taxes go up?
Although George Osborne claimed the Conservative government would be forced to raise the basic tax rate by 2p in the pound – from 20p – and 3p rise in the higher rate - currently 40p.
But that would go against the Tory manifesto pledges and, with David Cameron no longer at the helm, would be an unlikely move.
More likely is an extended period of austerity.
Will my pension be safe?
The Prime Minister caused a stir during the campaign by saying the ‘triple lock’ on state pensions may be broken.
That is the assurance that pensions increase with wages, inflation or by 2.5 per cent every year, whichever is the highest.
However, as his critics pointed out, this is a political choice and would be unlikely to be chosen by David Cameron’s successor.
With regards to private pensions, if the Bank of England softens the Brexit blow with quantitative easing, returns on annuities would suffer.
Will my savings suffer?
Again, this depends on the Bank of England’s reaction to the pound’s descent.
If interest rates rise, it will be great news for savers, who have seen low interest rates limit returns for many years.