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The Brexit Effect

Jeremy Corbyn’s Labour was expected to stay the underdog throughout, but came through as a close second with huge waves of support from younger voters and those who had previously voted UKIP – which Conservatives had hoped would swing in their favour.

May claims her new coalition government will bring ‘certainty’ to the UK in the upcoming months before Brexit, with talks set to go ahead on the 19th of June.

But what will these unexpected results mean for expats?

During their campaign, Theresa May was met with a huge backlash following her announcement that Conservatives planned to ditch the Triple Lock system for state pensions. The Triple Lock system was introduced in 2010 by the Conservative-Liberal Democrat coalition government. It is guaranteed to increase the state pension every year by the highest of either inflation, average earnings or a minimum of 2.5%, with the aim of protecting pensioners from meaningless increases in the state pension – such as the 75p a week rise in 2000 – and to make sure their income is not eroded by the gradual increase in the cost of living.  

The DUP stated in their manifesto that they would commit to the state pension triple lock and winter fuel payments, so there is a split in opinion over whether both parties will or won’t seek to scrap the system. Experts have warned that pension and social care reforms are set to be left in limbo, despite being urgently needed. It is likely to be a ‘wait-and-see’ case.

One of the biggest buzz words of the entire snap election was Brexit. It made up a huge part of Theresa May’s “strong and stable” campaign, but with negotiations just around the corner – things are looking just as grey as it was before.

Since Brexit was announced, the pound sterling has fallen against the dollar. Last year, the exchange rate of the pound dropped from 1.4 to 1.15 after the results of the referendum, with another drop after Theresa’s hung parliament was revealed – down 2% against the dollar and euro.  

Another question on most expats’ lips is whether they would be able to retain their EU citizenship. At present we aren’t entirely sure if this will be officially available until negotiations begin on the 19th of June, but chief Brexit representative Guy Verhofstadt said he hoped to convince European leaders to allow Britons to maintain certain rights if they apply for them on an individual basis.

Perhaps the best advice for British Expats who intend to stay in Spain would be to ensure you have got your Padron and Residencia in place which will surely strengthen your position as to your rights as a Spanish Resident regardless of Brexit.

Other News

Pension Freedoms. Are they for you?

Readers may remember the pension freedoms announced by George Osborne in 2014.  These became effective on April the 6th this year. The fanfare accompanying the announcement and indeed subsequently is often set against the backdrop of pensioners sat in Daimlers or on Yachts having drawn all their money out and lavished it on some frivolous purchase.

The reforms promised that over 55’s would have access to their pension cash as they pleased whether it was the full amount or in small payments. Or indeed it could be left invested. The choices on offer appeared staggering, always bearing in mind that there are tax implications for taking large sums.

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Here today, gone tomorrow?

While the markets are going up and down madly, are you being looked after by your financial adviser? The economy has dominated the headlines since the turn of the year, and many people are concerned about their hard-earned savings and investments. Very often, the best approach is to either wait out for markets to calm down, or take advantage while they are lower.

Although there is a risk in wanting to take action every time big market moves are on the news, it’s still worth asking a few questions regularly: does the reasoning behind your investment strategy still hold true? If so, should you be taking advantage of lower valuations by committing more resources to your long-term finances? If it doesn’t hold true anymore, is it the right time to move out of certain investments and take a different approach with your money?

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