Millions of British holidaymakers and expats are poorer today than they were yesterday because of Boris Johnson’s controversial suspension of the UK parliament, causing the pound to tank.
However, there are ways to mitigate the downsides, says the chief executive and founder of deVere Group, one of the world’s largest independent financial advisory organisations.
Nigel Green’s comments come as sterling dropped 0.7 per cent against the dollar to $1.221 on the news that Britain is now significantly closer to a no-deal exit from the European Union. It has also dropped 0.6 per cent against the euro to around €1.101.
He notes: “Any moves towards taking Britain out of the EU without a deal on 31 October results in further falls to the already Brexit-battered pound. Yesterday’s suspension of parliament was a major step in this direction.
“Sterling is unlikely to recover until the Brexit uncertainty lifts – and even then, it may take several years until the UK and EU adjust accordingly.
“As a result, millions of British holidaymakers travelling outside the UK, plus British expats who live and work or are retired abroad and receive salaries or pensions in sterling are, in real terms, worse off today than they were yesterday.”
Mr Green continues: “For holidaymakers, prepaid currency cards will help them lock in exchange rates, when doing so is in their favour, and avoiding future uncertainty – and no-one knows what the future holds when it comes to Brexit. There is a distinct possibility the pound could sink further against the euro and dollar due to political events.
“British expatriates can typically use their expat status to their financial advantage – by capitalising on tax-efficient savings vehicles and investment opportunities available to them. These include offshore bonds and overseas pension transfers.”
As news broke on Wednesday that the Queen had accepted the UK government’s request to suspend parliament, the deVere CEO observed: “Looking at the nose-diving pound and a looming UK recession, the outlook is somewhat bleak in Britain. Those with UK financial assets – including UK pensions, bonds and sizeable holdings of sterling – should now perhaps consider the available international options to protect their wealth.”
He concludes: “The millions of holidaymakers and expats hit by a weaker pound should be exploring the established ways to mitigate the effect this has on their purchasing power and living standards.
“This is especially the case as it seems the pound may remain weak for some time.”