How brexit will effect your personal finances

Are you worried that Brexit will put you into further debt? As Britain is soon to be heading out of the EU this is going to affect people’s finances in many ways. Many people will be wondering how this is going to affect them going forward. Mortgages are expected to increase drastically, fuel prices also to increase, the NHS could be privatised so potentially there could be no more free health care, properties abroad expected to decrease in value, house prices to drop and shop prices to rise.

Ironically it seems that the majority of those that voted leave are among those most affected by changes in the economy. Low income earners with little or no disposable monthly income would be worse hit by inflation, interest rate rises and house value drops.

Most people’s single largest bill every month is their mortgage or rent so it is understandable that people could be panicking if Brexit is to affect this. Before the vote the Treasury predicted that if we were to leave the EU it would mean a rise in borrowing costs of between 0.7% and 1.1%. Also, the then Prime Minister David Cameron claimed that the average cost of a mortgage will increase by up to £1000 a year which is a massive amount for a lot of people and will worsen their financial status.

As the value of sterling weakens, the cost of imported products will increase, so it is expected that the shop prices are going to increase, by how much yet nobody knows. However there is a long way to go yet as inflation stood at just 0.3% in the year to May. That said, it was announced on 13 December 2016 that the UK's inflation rate was up to 1.2% in November  from 0.9% in October. This shows a clear increase along the lines of previous predictions. The increase was attributed mainly to higher clothing prices with prices rising at their highest level bfor 6 years. Fuel prices have also seen inflationary pressure.

Leaving Europe will have an effect on the strength of the sterling and as it weakens against the dollar this will have an effect on fuel prices. This is caused as oil is priced in dollars which will make it more expensive to buy with Sterling. The AA has warned that due to the exit family fuel bills would rise by over £500.

The NHS, or at least many parts of it, is expected to be privatised meaning there will no longer be free health care. The cost of health insurance will then rise significantly which will increase the amount of money that is spent every month. Not getting health insurance is a massive risk as some treatments can cost many thousands of pounds which just won’t be affordable for most people.

House prices abroad are expected to drop due to the exit as there will no longer be free health care outside of Britain and the cost of travelling to another European country is expected to rise. So people with properties abroad are set to suffer if they are to sell, but if they are to keep the properties there is no longer free medical care and the cost of insurance will increase. House prices in Britain are also dropping because of the Brexit vote. The economy has weakened due to the uncertainty of the exit which has made house prices fall, which aren’t expected to start rising again until at least 2018.

If you are affected by any of this, here at X-Debt, we can help ease your debt with an IVA. An IVA is an arrangement whereby an Insolvency Practitioner will negotiate with your creditors on your behalf in order to reduce your monthly payments on unsecured debt such as personal loans, credit cards etc. to a more manageable level. An IVA seeks to protect a family home should this be owned by the debtor so there is reduced worry over the family home being repossessed.

Get in touch now by calling 0800 043 2424 or 0161 787 3400 or Contacting Us Here

An IVA will generally stretch over a time period of 5 years and at this time any outstanding debt will be legally written off. An IVA will also take into account essentials such as, mortgage or rent, food, household bills, allowances for motor expenses etc.