News & Insights

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.

This communication is for informational purposes only and is not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.

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