The Consequences of Brexit [part 4]

[apelike]

Secondly, if we assume that the 75k lost jobs in the city is correct.

 

I think the problem here is assuming its correct as it seems more likely to be around a quarter or less than that and that may be spread over several years. The BBC article has JP Morgan stating it may have to move 4,000 jobs, now revised to 1,000 and the Swiss bank stated 1,000 and now its possibly only 250. Seems so far its just a guesstimate and they don't really know until Brexit is finalised.

 

It also states:

 

"Even if 75,000 jobs do go, London would still be by far the largest financial centre in Europe with over one million people employed in financial services in the capital and across the rest of Britain. And the UK would still enjoy a healthy trade surplus in financial services with the rest of the EU worth many tens of billions of pounds."

[I1L2T3]

Something we’re pondering is when to start moving our funds out of the UK. We’re not minted but have enough now for 4-5 years of living costs without working. Some of it is off shore already (not as exotic as it sounds - just sitting in accounts my wife has held for decades in her home country). I’m not sure I want the bulk of my money hanging around in British bank accounts to be honest.

 

A question of timing I guess.

[L00b]

Something we’re pondering is when to start moving our funds out of the UK. We’re not minted but have enough now for 4-5 years of living costs without working. Some of it is off shore already (not as exotic as it sounds - just sitting in accounts my wife has held for decades in her home country). I’m not sure I want the bulk of my money hanging around in British bank accounts to be honest.

 

A question of timing I guess.

Assuming your funds are GBP, I'm afraid that you missed the comfy cruise boat since the GBP has tanked a fair bit since June last year, and stayed there ever since. Not giving any lessons here, as I'm going to have the exact same problem once we've sold our house (our one remaining asset over here, and with a non-trivial amount of equity in it; I'll not count the 2 cars because they're worth beans - I deliberately held back from replacing them over the last couple of years, 'just in case').

 

The one certitude is that March 2019 is the logical end stop, timing-wise. Because the GBP is going to take one monumental slap around then, irrespective of whether Brexit is benign and with deal, or not.

 

The main timing factors and milestones in the interim, are going to be-

 

(i) how much further the GBP might tank, if a no-deal becomes ever more likely as time goes by,

(ii) how much ground the GBP might regain, if the BoE starts ratcheting the base interest rate before then,

(iii) the extent of yo-yo'ing between (i) and (ii) if both conditions happen simultaneously,

(iv) March 2018 (1 year to go to actual Brexit - many regulatory/procedural pigeons (EEA visas, OpenSkies, etc.) coming home to roost early around that time)

(v) October 2018 (6 months to go to actual Brexit - the notional deadline by which to complete 'the deal', if it is to be ratified by all relevant assemblies, parliaments, etc. across the EU 28 in good time by March 2019)

 

The big uncertainties are any politically-driven timing surprises (e.g. deliberate crash-out before March 2019, new GE before March 2019) and whatever capital controls might be introduced by whoever is in No.10 and No.11 at any given time (very remote, but not impossible).

 

If a new GE is announced before March 2019, as Labour is much more likely to get into No.10 this time, you should have contingency plans in place allowing you to shift your capital very quickly indeed, because capital controls are prime Corbyn/McDonnell policy territory.

 

Might be an idea to consider alternative and more border-impervious forms of liquidity, tbh. Bitcoin, precious metals, <...>

 

But for GBP cash, and in any case, consider using a funds transfer service provider, it will likely turn out cheaper (in terms of rate and fees) than using your bank(s). And perhaps get started soon-ish, in small amounts to mitigate the lossy FOREX.

Edited October 31, 2017 by L00b

[tzijlstra]

Something we’re pondering is when to start moving our funds out of the UK. We’re not minted but have enough now for 4-5 years of living costs without working. Some of it is off shore already (not as exotic as it sounds - just sitting in accounts my wife has held for decades in her home country). I’m not sure I want the bulk of my money hanging around in British bank accounts to be honest.

 

A question of timing I guess.

 

Property in Germany, rock solid, especially in Berlin and Hamburg/Bremen which are designated growth areas.

 

Also - if your partner has a pension in an EU country you might still be able to boost that with an investment - depending on national laws (I can do so tax-free). I built up pension in the Netherlands for 4 years but that investment is now equal to 12 years as I keep topping it up, it will soon be 20 years. That way, when it comes to my retirement, I will also have Euros to rely on, no matter where I live.

[Longcol]

I'm retiring at the end of March (o/h finished last July) - at the end of November we're off to France for a week house hunting in France (Dordogne/Lot). We've a goodly amount of cash and are selling up over here in the spring.

[tzijlstra]

I'm retiring at the end of March (o/h finished last July) - at the end of November we're off to France for a week house hunting in France (Dordogne/Lot). We've a goodly amount of cash and are selling up over here in the spring.

 

Good luck! I assume your pensions will be paid in GBP? Any way of becoming less valuta-dependent?

[Longcol]

Good luck! I assume your pensions will be paid in GBP? Any way of becoming less valuta-dependent?

 

We're in the fortunate position of not having to worry too much about our pensions - and house prices where we are looking still seem to be coming down. Plus being cash buyers the estate agents we've been in touch with reckon we should be able to negotiate a handy percentage off asking prices.

[mafya]

That is all good and well. However, once Brexit has happened, are those jobs going to go as well? After all, they are only recruited for Brexit in the first place.

 

Secondly, if we assume that the 75k lost jobs in the city is correct. How are we really paying for these extra civil servants? If the tax receipts from those jobs alone are no longer there as well as the business those jobs bring into the UK economy.

 

We may legalise cannabis and rake in millions in tax, if the USA can do it then why can't the UK?

[L00b]

Also - if your partner has a pension in an EU country you might still be able to boost that with an investment - depending on national laws (I can do so tax-free). I built up pension in the Netherlands for 4 years but that investment is now equal to 12 years as I keep topping it up, it will soon be 20 years. That way, when it comes to my retirement, I will also have Euros to rely on, no matter where I live.

That is actually spot on, as I'm looking to do exactly that in our destination country (i) because the state pensions there are rock solid, over-funded (4 years' reserves ahead of the curve) and extremely generous (70+% of average salary for a full 40 years' worth (or equivalent) of contributions, rather than the UK set-level-for-all pittance) and (ii) because there have been noises, admittedly very muted but getting increasingly frequent of late, of a "private pensions haircut 2.0" à la Gordon Brown in the UK - which I could well see happening if Brexit turns as calamitous as I expect. Edited October 31, 2017 by L00b

[khan2020]

I don’t understand what will happen once we leave European countries. Does that mean we go smaller or bigger in size and businesss