Brexit Uncertainty Will Hit Expats In The Pocket

Lisa Smith, BA (Hons), CeFA

Most British expats are concerned that a leave vote in the Brexit referendum will leave them high and dry in Europe as stateless citizens.

Two thirds of British expats confirmed that they were worried a leave the European Union result would impact on their lives.

Less than a quarter disagreed, while another 8% did not know how a leave vote would affect them.

The survey was carried out by expat financial services company deVere Group in major British expat enclaves across the EU, including Spain, Germany, France, Italy, the Czech Republic and Hungary.

In the UK, polls give no certain indication of how the country will vote.

Double trouble for expats

Most mainstream research reveals the remain and leave camps are neck-and-neck.

“I think two things need looking at for expats,” said Nigel Green, CEO of deVere Group.

“Expats are likely to suffer quicker and to a greater degree than voters in the UK.

“We don’t know whether state pensions will remain index-linked, how foreign governments will let expats access free healthcare and whether they will educate expat children under existing arrangements.

“Next, a Brexit will hurt the personal finances of expats and everyone in the UK.

“Should Britain leave the EU; we can expect Sterling to weaken considerably against the Euro.  Gilt prices are likely to fall and yields rise, as inflation creeps in due to the weaker Pound, and a new populist government gives up on Chancellor George Osborne’s budget austerity.

Expat rights at risk

This would lead to higher mortgage rates – even if the Bank of England leaves its policy rate unchanged as it tries to calm the domestic economy.

House prices can be expected to fall, triggered by buy-to-letters wanting to sell rather than roll-over more expensive mortgages.

“On the stock market, small and mid-cap stocks will underperform as they don’t have the export earnings that save the FTSE 100 stocks from a wave of investor pessimism in the outlook for the UK economy.”

Green also flagged that freedom of movement laws in the EU could be repealed for British expats if the referendum on June 23 ends in a leave vote.

He argues this leads to immense uncertainty for expats who own homes and businesses in the EU and what their status might be after the vote.

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