Britain's decision to vote to leave the EU has sent stock markets and sterling into a spin, and made many people fear for their financial future. So how will Brexit hit your pocket?

Post-Brexit money woes

Share prices

Stocks and shares crashed in the shocking aftermath of the referendum, wiping billions off the nation's pension and Isa savings. However, markets quickly calmed, and the meltdown wasn't as bad as expected, although further after-shocks are inevitable.

Tip: Don't panic and sell your investments, otherwise you risk selling at the bottom of the market. Given time, markets usually recover after a bout of volatility.

 

Savings

Savers have suffered more than seven years of near-zero rates and the Bank of England could be forced to cut interest rates again, which would further erode the returns on cash.

Tip: All you can do is shop around for the best possible rate. You may get a higher return from a one or two-year fixed-rate bond.

 

Mortgages

What is bad news for savers is good news for borrowers, and mortgage rates could fall to new lows if base rates are cut.

Tip: If you haven't switched mortgage for some time, you could make big savings by shopping around for a cheaper deal.

 

House prices

Strong demand, a shortage of supply and low mortgage rates should prevent a property price crash, despite short-term uncertainty.

Tip: If you have found the perfect home and can afford your mortgage, don't be put off by today's uncertainty. This will drag on for at least two more years, and do you want to wait that long to move?

 

Pensions

If you are still some years away from retirement, you can afford to ignore the current volatility and keep your money invested.

If you plan to buy an annuity soon you might want to act soon as rates could fall even lower.

Once you have obtained a quote from an annuity company, the terms are usually guaranteed for between two and four weeks, giving you time to see what happens next.

Growing numbers of retirees now leave their pension invested via income drawdown and will have seen the value of their pot fall, but they should sit tight and wait for markets to settle.

Tip: Whatever your position, don’t panic and consider taking independent financial advice to plot your next step.

 

Holiday money

The falling value of the pound will make your holiday more expensive, especially if heading for the US due to the strong dollar.

Tip: You can get a far better deal and offset some of your losses by purchasing your currency online in advance rather than at the airport, where you will typically get a poor deal.

 

Travel cover

If heading overseas your travel insurance policy will cover you exactly as before, and so will the European Health Insurance Card. This will continue until the UK officially leaves the EU.

Tip: Brexit should not affect your travel plans, although it could make them more expensive.

 

Prices

As sterling weakens, the cost of imported products will increase, so you may notice prices in the shops are rising.

Tip: There is little you can do about rising prices aside from budgeting and planning your spending more carefully

EDITOR'S NOTE: This advice was accurate from 24 July 2016

 

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