From mortgage repayments, pensions and petrol to savings and graduate jobs, we look at the practical implications of Britain’s withdrawal from the EU

Britain has voted to leave the EU. Some ramifications will take time to become apparent, but many of the implications are already becoming clear. So what does the Brexit vote mean for you, and where will you see the effects first?

Will my summer holiday be more expensive?

Sterling’s overnight collapse pushed it down to a low of €1.20 against the euro, or 15% less than the €1.42 rate enjoyed by holidaymakers last summer. However, it recovered slightly in mid-morning trading, pulling back to €1.25, meaning the one-day fall is closer to 4.5%. Against the US dollar it is down more, by around 6.5%

In terms of spending, that means a family who last year got through £500 while on holiday will this year need to find around £65 more.

More immediately, holidaymakers trying to change their money into euros are finding it tough; Thomas Cook has temporarily suspended some dealing over its online travel money website. Tesco also called a halt to travel money services this morning but has since resumed.

Thomas Cook has also placed a temporary £1,000 limit per customer on purchases of foreign currency in its High Street shops.

“We have temporarily suspended our travel money website following unprecedented customer demand for foreign currency overnight and this morning,” it said.



“We apologise to all customers affected. Our immediate priority is to ensure that we have enough currency in store to fulfill outstanding orders.”



Most currency commentators say that holidaymakers should in any case hold off from buying euros for now.

Ian Hughes, of financial researcher Consumer Intelligence, said: “We would strongly advise anyone planning to buy foreign currency this weekend to hold off. And anyone, including small business owners, who has to make foreign currency payments should also delay if possible.



“The margins charged by banks and payments bureaux are likely to peak over the weekend if they are still quoting rates. By the middle of next week it should have settled down, although consumers may still lose out on euros.”

As for freedom to travel, Britons will in all probability be able to enjoy visa-free travel to EU countries for the foreseeable future. Travellers in the coming months will continue to queue with EU passport holders when going to Europe, but be prepared to switch to the “All other passports” lane when we’ve left.



Is it a bad time to buy a house?

Facebook Twitter Pinterest Brexit could hit housebuilders hardest. Photograph: Ian Nicholson/PA

This morning there are signs that nervous buyers are pulling out of transactions, fearing that the result may push prices down and leave them in instant negative equity.

One buyer, who wanted to remain anonymous, said: “I started the process of buying a house months ago when the possibility of Brexit seemed a bit distant and not of huge concern.

House price fall could follow Brexit, say experts Read more

“Now it’s actually happened and the effect it’s already having on financial markets makes me hesitant about continuing with the purchase.”

Henry Pryor, a respected independent property market expert, took to Twitter this morning to predict that UK house prices will fall by 15%, with transaction volumes down by 20%, while at KPMG they are predicting a 5% fall in prices across the regions.

Housebuilders quickly emerged as among the most vulnerable to Brexit Construction companies and estate agents were among the worst hit in the first minutes of trading. Some London developers have inserted Brexit clauses, promising to refund buyers in the event of a leave vote, but others may also find that investors are trying to escape deals.

If sterling continues to plummet there may, however, be a buying opportunity for overseas investors. Peter Wetherell, a Mayfair estate agent, has predicted a “Brexit bubble” as buyers rush in to snap up property in London’s priciest neighbourhoods.

“For overseas buyers, a big drop in the value of sterling will effectively offset the stamp duty and tax adjustments, and make prime London property a lucrative investment,” he said. “Dollar-based Middle East and Asian investors in particular will look at short-term buying opportunities in central London.”

How will it affect my mortgage?



Facebook Twitter Pinterest Mortgage payments could be affected if interest rates rise. Photograph: Christine Balderas/Getty Images

All eyes were on official Bank of England movements, with governor Mark Carney speaking soon after David Cameron on Friday morning to reassure the markets.

He stopped short of a hike in interest rates to defend the pound, which would have hit millions of households on tracker-style mortgages. Around 700,000 people are on Nationwide’s 2.5% standard variable rate, for example, and they would have been hit badly. If the base rate goes up by 0.5%, it will take the cost of a £100,000 mortgage to £474 from £449.

There was no immediate announcement on interest rates and it is just as possible that they could fall to provide liquidity and restore order to markets. Each half-point change in rates adds or subtracts around £25 a month to most people’s repayment mortgages. Those with interest-only mortgages see steeper changes – around £42 a month for every 0.5% rate change.

Already there are signs that new fixed-rate mortgage deals could drop – with many more coming in below 2% – in response to changes in the bond markets.

Ray Boulger, of mortgage broker John Charcol, said a fall in gilt yields on Friday morning would reduce the cost for lenders of longer-term funding “and hence open the door for even cheaper fixed-rate mortgages”.

He advised those thinking about taking out a fixed-rate mortgage to hold off for a week or so.



What does it mean for the price of petrol?



Facebook Twitter Pinterest Petrol and diesel prices are expected to increase. Photograph: Nick Ansell/PA

As with so many seismic political decisions, it’s going to hit the price at the pumps so get ready for the cost of petrol to rise in the next few days. Crude oil is priced in dollars, and once that figure is converted into today’s lower sterling rate, the price is likely to increase.

The AA warned on Friday morning that petrol and diesel prices were set to creep up as a result of the 6%-7% fall in the pound.

However, the leave vote sent crude prices falling 3.7% to $49 – offsetting the pound’s fall for UK drivers. Currently, unleaded petrol and diesel both cost around £1.11 per litre, substantially down from the £1.50 per litre seen in 2012.

Edmund King, president of the AA, said: “Fuel prices will be the biggest immediate concern of drivers with the weaker pound and the chancellor’s prediction that leaving the EU would lead to fuel duty increases. We will oppose duty increases and continue to monitor the situation on behalf of our members.”

It may make sense to fill up this morning at garages that have not raised their prices. Note that fuel duty is 57.95p a litre for both petrol and diesel, and remains the biggest component of the price we pay. Motorists also pay 20% VAT on fuel.



Should I move my savings?



Facebook Twitter Pinterest The rates on cash Isas could fall. Photograph: Alamy

Many cash Isas already pay only 1% interest or less, and could fall to near-invisible levels if base rate is cut in the coming weeks. Some fixed-rate Isa deals were on Friday morning paying rates of 2% (over three years) or 1.5% (fixed for two years). These will inevitably soon be withdrawn and replaced with worse rates.

Will the stock market freefall hurt my pension?

Facebook Twitter Pinterest As pensions are only around 50% invested in shares, with the rest in bonds, the immediate impact will not be as bad as the FTSE numbers suggest. Photograph: Alamy

When the FTSE opened on Friday morning, the initial collapse was huge, wiping more than £100bn off the value of shares in the top 100 companies in a matter of minutes. Stock markets around the world have reacted with shock: the Tokyo market was down 7%, Hong Kong down 5% and Sydney is off 3.5%. In Europe, the German market dropped nearly 8%, as did the French.

If you have a “defined contribution” type of pension fund where the value is dependent on market movements, you’ll be worst hit. But these days pensions are only around 50% invested in shares, with the rest in bonds, so the immediate impact will not be as bad as the FTSE numbers suggest.

Financial advisers were out in force this morning telling small investors to keep calm and carry on. Neil Woodford, Britain’s most highly respected fund manager, said: “Markets are clearly shocked by the decision but, in our view, it is not as negative a development as the market’s initial reaction appears to imply.

“As I have said on a number of occasions recently, the global economic backdrop will continue to be challenging, regardless of our membership of the EU. Many of the greatest economic challenges that we face now and in the future, in my view, dwarf the economic issues associated with today’s outcome.”

He added: “Nevertheless, in the near term it is likely that UK GDP will be lower over the next 18 months or so than if we had voted to remain. But, because inflation will (temporarily) be higher following the fall in the pound, nominal GDP could well be little changed. Growth in consumer cash flow will be marginally lower, principally because fuel prices will be higher but of course exporters will enjoy something of a windfall.”

Is my job safe?

Facebook Twitter Pinterest Will Brexit lead to more opportunities in the UK for university leavers? Photograph: Chris Ison/PA

It is difficult to know exactly what impact on jobs leaving the EU will have. Much will depend on whether a recession will be triggered by the referendum result, as many international financial organisations have warned, and what deal the UK can negotiate with EU member states.

Experts have warned that those most likely to be affected by leaving the union will be those employed in the service sectors that trade with the EU, and forecast that those working in financial services, tourism and car manufacturing will be major losers as these industries struggle post-Brexit.

International companies previously warned that the UK would become a less attractive place to set up shop if it left the EU, meaning potentially fewer companies will now come to Britain and offer work to UK nationals.

If a recession is on its way, there may also be fewer jobs on offer from UK companies. A study by PathMotion surveying HR managers and senior executives of 75 top UK graduate employers, released last week, revealed that 49% of employers said they were likely to lower their intake of graduates if Britain left the EU.

A leave vote will almost certainly make it more difficult for Britons to get work overseas. As part of the EU, UK citizens are allowed to live and work anywhere within the 28 member states, but this will probably change now the UK has opted out and Brits might be required to obtain visas to live and work in Europe.

A key argument of the leave campaign was that a drop in immigration as a result of Britain leaving the EU would decrease competition, making it easier for Britons to find work in the UK.

The PathMotion survey bore this out, finding that if UK companies were unable to freely hire EU graduates as a result of Brexit, 25% of employers said they would be likely to increase recruitment of British graduates.

However, given that many European workers are employed in minimum wage work, the reduction in EU immigration may mean more UK nationals in London coffee houses and picking carrots in Lincolnshire. Given the low wages of these jobs, it is a shot in the dark as to whether consumers will pay more for goods, which would see wages for this work increase, or whether farmers and cafe owners will be priced out of business.























