25 Brexit need-to-knows

Incl house prices, visas, flights, consumer rights & more

At 11pm on 29 March 2019, the UK is set to leave the European Union. It's a once-in-a-generation event which will affect everyone in the UK, their finances and consumer rights. With much still up in the air though, in this new guide we give you the facts where there are facts, and MSE founder Martin Lewis' risk analysis where there aren't.

Warning - some of this guide is based on intelligent guesswork... We've tried to give you accurate and impartial information, but this is a fast-moving situation, where much is still unknown. So this is what's likely to happen based on what we do know so far - it's not set in stone. We'll update this guide regularly as Brexit approaches.

 

This is also the first incarnation of this guide, so let us know if you have any feedback or suggestions for improvements in the Brexit need-to-knows forum thread (but please keep the politics out of it!) 

What Brexit means for you, including...

What's going to happen when we leave the EU?

Unless you've been living under a rock for the past two years, you've probably heard the term 'Brexit' and know it's shorthand for Britain's exit from the European Union.

Yet beyond that, there are many different views of what Brexit entails - usually depending on whether it is something people support or not. Slogans like "Brexit means Brexit" and lots of confusing EU jargon don't make it easy. So here’s a quick briefing….

In a landmark referendum held across the UK on 23 June 2016, 52% of those who voted supported leaving the EU.  

While the referendum was legally only indicative (ie, it didn’t in its own right have the force of law), it was seen as politically binding.

However, as Martin Lewis says: "Some cared about immigration, others sovereignty, some the economy - yet the disgrace is we had a black-and-white vote on a rainbow of issues.”  Other than the phrase 'leave the European Union', there was no definition of what Brexit meant on the ballot paper, and this has led to huge arguments since about how far the UK separates its relationship from the EU. 

On 29 March 2017, the Government triggered a rule known as 'Article 50', which started Britain's withdrawal from the EU. That was passed through Parliament, and it dictated we’ll leave exactly two years after that, on 29 March 2019.

Over the last year and a half, Britain has been negotiating with the EU over what kind of arrangement we'll have with other countries in Europe once we leave.

On Wednesday 14 November, Prime Minister Theresa May announced a 'Withdrawal Agreement' had been reached with the European Union, outlining the basis of a deal for when we leave.

MPs were supposed to vote on whether to accept this deal on Tuesday 11 December, but this has been delayed, as Prime Minister Theresa May admitted it "would be rejected by a significant margin".

Theresa May now says she plans to "address" concerns with the deal and then put it before MPs again, though it's not clear when this will happen, or if MPs will support it. If they don't, we could still end up with 'no deal', or not leaving the EU at all. All this will (hopefully) become clearer in the coming weeks. 

What will the Brexit deal be?

Who knows! Nothing is agreed yet, and nothing is agreed until it’s all agreed. On 14 November 2018, Theresa May laid out the basis of a "Withdrawal Agreement" with the EU, which sets out the key facts of what our relationship with the EU could look like after 29 March 2019.

The key part of this is that there would be a 'transition period' between when we leave next March and the end of 2020, during which some of the current relationship between the UK and the EU would continue. The agreement also allows for this period to be extended.

But this deal has yet to be passed by MPs, and currently there's huge uncertainty, as Theresa May has delayed a vote on it - so everything's very much up in the air. 

If MPs don't pass the deal, an alternative is a 'no deal' scenario, which means we'd leave the EU without any agreement in place. Our relationship would instead by governed by World Trade Organisation rules, which set a minimum standard - but what exactly might happen on 29 March under this scenario is much less certain... 

Of course, some are campaigning to reverse Brexit, and to have a second referendum (sometimes referred to as a 'People’s Vote') on the final terms. On 14 November 2018, Theresa May appeared to acknowledge for the first time that not leaving the EU IS a possibility. She said the choice facing the UK was between her deal, no deal, "or no Brexit at all".

What can we expect for the economy?

This was one of the most hotly debated issues at the time of the referendum - see Martin’s original ‘how to vote in the EU referendum’ blog. Some who voted 'Leave' believe it will mean new opportunities for the UK economy. Others have predicted it will lead to economic crisis.

Martin: 'The only certainty is... uncertainty'

"The only thing that is certain for the economy at the moment is the uncertainty. That isn’t a trite phrase. It means when you’re making any decisions, you have to factor in the chance of substantive change.

"Rather than trying to second-guess economic shifts, it is best to focus on your own personal finances, which are more controllable and predictable (do a Money Makeover if you’re worried).

"Clearly Brexit is likely to be one of the major factors impacting interest rates, foreign exchange rates and the strength of the UK’s economic growth, all of which have knock-on effects for your job security, house prices, mortgage and savings rates and more. Yet there is no agreement on which way.

"And to complicate it further, this isn’t just about the practical outcome of Brexit itself. It's about the prediction of the practical outcome of Brexit.

"Markets move based on sentiment. Whether rightly or wrongly, the markets don’t like Brexit, and they don’t like uncertainty - as we saw from the large drop in the strength of the pound when it was announced (see more on holiday money later). 

"So it is likely the more loose the final situation, and the less close the UK’s future relationship with the EU, the worse the markets will react in the short-term. Then after a while the practical effect itself takes over.

"Negative markets likely mean the pound weakens - which helps exports but pushes up the prices of many of the things we pay for - and demand weakens which can impact house prices."

Here’s a bit more on specifics:

  1. The Bank of England has warned house prices could plummet

    Experts continue to warn that a house prices crisis could be just around the corner. For example, in November, the Bank of England produced a report saying that in the absolute worst case scenario, a no deal Brexit could lead to the economy shrinking and house prices falling by close to 30%, as well as unemployment doubling and inflation rising to 6.5%.

    Martin: 'These are worst-case predictions'

    "These are absolute worst-case scenario predictions. The likely outcome is nowhere near as harsh as that.

    "And of course, house prices are a double-edged sword - if the price drops, it means they become more affordable for many not on the housing ladder.  

    "Those who already own houses don’t lose out in the short term as any price drops are just on paper. The real losers would be those looking to move (and not upgrade), cash up, or use their equity to release extra cash."

  2. Mortgage, loans and savings rates could, er, rise or fall

    After years of no change leading up to 2016, the Bank of England dropped the base rate - which some mortgage and savings rates are tied to - in the wake of the EU referendum in order to stave off a recession. Since then, the base rate's risen twice, and now sits at 0.75%. 

    Martin: 'For mortgages, loans and savings, I'd forget the predictions'

    "This is a really tricky one.

    "If the economy declines because of Brexit as the Bank of England's suggested, then on first thought you'd expect interest rates to drop - as that makes the cost of borrowing cheaper and gives less incentive to save - meaning people will spend more, stimulating the economy.

    "However if the pound drops due to Brexit, it'll cost more to buy things from abroad, which will push up inflation. And the usual way you try and tackle inflation is by increasing interest rates (to quell demand, so prices fall). In fact in September, Mark Carney suggested Brexit rate rises.

    "Of course if Brexit boosts the economy, then the reverse can happen.

    "For those with mortgages, I would forget the predictions. The rates of new mortgages are still pretty close to historic lows right now, so if you want certainty and can get a cheap fix, then do it. 

    "With hindsight it may not turn out to be the cheapest thing, but rates are so low they can’t drop that much further - and certainty has value too. See Compare fixed mortgages and the Free remortgage guide for more.

    "For savers, while you can lock in fixed savings rates, you’d be locking in at relatively low historic rates. So I wouldn’t do it just due to worries over Brexit risks. If fixing your savings is something you’d do anyway (as you get better rates) then it’s fine, but I’d be wary of fixes longer than three years with such uncertainty around. See Top fixed savings.”

    “Most personal loan rates are fixed at the outset, so if you’ve got one it is unlikely to change. However if you are due to get a loan, again we are currently (for loans above £3,000) close to or at all-time record lows. So while rates could sneak lower, if you need to borrow, sooner is safer.

    "Credit card rates tend not to be too closely linked with UK interest rates so are unaffected."

The impact on flights, flight delay compensation... and Easter hols

If there's no deal, some worry there could be major disruption to flights in the aftermath of B-Day - so here's what's likely to happen to flights. (See below for more travel need-to-knows).  

  1. Some flights could be disrupted temporarily

    The Government's warned that if no deal is struck with the EU, there could be disruption to travel in the days after Brexit - and there are fears this could mean some flights are grounded.

    If the UK leaves the EU in March 2019 with no agreement in place, UK and EU-licensed airlines would lose the automatic right to operate air services between the UK and the EU without seeking advance permission.

    EU-licensed airlines would also lose the ability to operate wholly within the UK (eg, from Heathrow to Edinburgh), and UK-licensed airlines would lose the ability to operate wholly within the EU (eg, from Milan to Paris).

    Airlines would have to seek permissions from the respective states (be that the UK or an EU country). And while the Government says it would plan to grant permission to EU airlines to continue to operate and would expect EU countries to do likewise in return, there are no guarantees.

    A recent Government document says: "It would not be in the interest of any EU country or the UK to restrict the choice of destinations that could be served, though if such permissions are not granted, there could be disruption to some flights."

    Another possible consequence is that luggage could have to be re-screened when travellers change flights in EU airports.

    Martin: 'If this was my only time off, I'd still be booking'

    "If the event of a no-deal Brexit, especially if it’s touch and go whether a deal will happen at the last minute, the imminent period after the 29 March may be tricky for travellers.

    "While I think the ‘all planes to the EU grounded' fears are likely overblown, certainly delay and disruption may occur - though hopefully all will be sorted pretty quickly.

    "If you are booking travel around that time, then if you’ve flexibility to move it a little earlier or later, you may as well. However if that was my only time off; personally I’d still be booking."

  2. The Government insists flight delay compensation rules won't change

    If you're on a flight to or from an EU country which is due to the airline’s fault, is delayed by more than three hours or your flight is cancelled altogether, under EU rule 261/2004 you're entitled to between £110 and £540 per person in compensation. Full details on this can be found in our Flight delays guide.

    Whether there's a deal with the EU or not, the Government insists flight delay compensation rules will remain the same. It says it will do this by writing EU261 into UK law.

    It's not entirely clear how this will work, but we've put various scenarios under which flights would currently be covered under EU261 to the Department for Transport - such as if you flew from the US (a non-EU country) to France (an EU country) on British Airways (a British provider).

    It is adamant that when EU rules are copied into UK law you'll still get the same cover you would if the UK remained in the EU. We'll wait for the detail to be revealed to check the small print though.

    It's also worth bearing in mind that if you fly between two European countries post-Brexit, you'll still be covered under EU261, as the law does not require you to be an EU citizen in order to claim compensation.

  3. But you're unlikely to get compensation if your flight's delayed or cancelled due to Brexit

    Under EU261, you only get compensation if a delay is deemed to be within the airline's control. Some airlines, such as Thomas Cook, are already putting clauses into their terms and conditions to explain that the cancellation of flights due to Brexit will NOT be deemed to be within their control.

    It is likely that airlines will still refund the cost of your ticket, but for the purpose of compensation, some airlines will class the cancellation in the same category as a natural disaster such as a volcano or earthquake. 

The impact on holidays and other travel around the EU

Currently UK citizens can travel, live, holiday or work anywhere in the EU without any special permits. After Brexit there could be some changes to this. 

  1. Visa-free travel will likely continue until 2020... and  longer for short stays

    The Government says it has an agreement with the EU which means free movement will continue for UK nationals from 30 March 2019 to 31 December 2020.

    During that time - often referred to as an 'implementation' or 'transition' period - an arrangement called the citizens' rights agreement means that UK nationals should be able to move or travel to another EU member state as they can now, without a visa.

    If there is a no-deal scenario, this could fall through - though the UK government says that's extremely unlikely as the agreement doesn't necessarily depend on the UK and EU reaching an overall 'deal'. 

    Whether the Government's agreement with the EU passes through Parliament or not though, it's looking like visa-free travel to Europe for short stays will continue indefinitely, as long as the UK reciprocates this for EU citizens. The European Commission has proposed that UK citizens will be able to take visa-free visits to EU countries for up to 90 days within a 180-day period, and EU citizens will be able to do the same to the UK. 

  2. Passports are turning blue - but you won't have to get a new one

    If you've a UK passport, it’ll likely be burgundy with the words 'European Union' stamped on the front. That will change, but you WON'T have to get a new passport straight away, and can continue to use your current one until it expires.

    For those getting a new or renewed passport after October 2019, it’ll be blue (before then it’ll still be burgundy but won't have 'European Union' on the front cover).

  3. Visiting the EU? You may need to renew your passport earlier

    At the moment, you can travel to EU countries on your passport right up to the point it expires.

    If there's no deal with the EU, you may need to renew your passport earlier. You'll need to renew your passport in advance if you plan to travel to certain EU countries and your passport will be older than nine years and six months on the date you plan to travel.

    If it is older than nine years and six months on the day you travel, you will not be able to travel to the following countries: Austria, Belgium, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, the Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and Switzerland.

    The Government says this scenario is "unlikely", but for now we don't yet know what's going to happen. For more info, see the Gov.uk website.

    Some passport renewals are now shorter too

    It's also worth noting that to prepare for Brexit, the Passport Office introduced some under-the-radar changes in September - first revealed by MoneySavingExpert - which mean that travellers who renew their passports now get up to nine months' less validity.

    See full info in our Passport applicants given shorter renewals MSE News story.

  4. The European Health Insurance Card may no longer be valid

    If you're a UK resident you're usually eligible for a free European Health Insurance Card (EHIC). This entitles you to the same treatment at state-run hospitals and GPs that locals are entitled to, at the same cost, when travelling in the EU (plus Iceland, Liechtenstein, Norway and Switzerland and some overseas territories -  see our Country-by-country EHIC guide).

    The hope is this will continue after Brexit. A Department of Health and Social Care spokesperson told us: "We remain focused on securing an agreement with the EU on reciprocal healthcare rights. This includes continued access to the EHIC scheme for UK residents and card holders."

    No deal could scupper this though. In the meantime, there's no harm in making sure you have a valid EHIC - around 5m expire each year, so it's easy to forget to renew. See our Free EHIC guide for full help.

  5. There may be disruption to coaches and the Eurostar around Brexit time

    The Government's warned that if no deal is struck with the EU, there could be disruption to travel in the days after Brexit.

    This could affect flights - as covered above - but also coach services to the EU, for example via the Channel Tunnel, and cross-border train services such as the Eurostar. Ferries are less likely to be disrupted though.

    See Martin's analysis above on what this means for those booking Easter hols now, and our Travellers face disruption under no-deal Brexit news story for full details of the Government's warning.

    • In the event of a no-deal Brexit, EU countries may choose to recognise UK-issued operator licences, which would mean coach journeys would continue without interruption - but this cannot be guaranteed.

      The Government says if a no-deal Brexit becomes a reality, it's planning on joining what's known as the 'Interbus Agreement' as an independent member - this means that school trips and holiday routes could still run.

      But there's no guarantee it would be able to join the Interbus Agreement before 29 March 2019 or that the protection given to school trips and holiday routes would also be extended to regular services - so it is possible coach services between the UK and the EU may be disrupted.

    • The Government says that after 29 March 2019, the UK and European countries would need to have mutual recognition of all necessary documentation, so that operators from the UK and the EU can continue to operate cross-border services without disruption.

      If this isn't achieved, train services between the UK and the EU may be delayed or cancelled. The Government says passengers booking cross-border services now are "responsible for ensuring that their insurance and ticket terms and conditions are sufficient to cover possible disruption".

      A spokesperson for Eurostar told us: "We are having constructive conversations with the Government on Brexit and will continue to do so. At this point in time, we plan and expect to maintain services on the existing basis and timetable following Brexit."

      In the event of a deal, it is hoped that services wouldn't be disrupted. The Government says that "given the large amount of trade and citizens travelling" on cross-border services, it hopes an agreement can be made.

    • The Government has not produced a document outlining what will happen to ferries in the event of a no-deal Brexit, as it did with coaches and rail travel.

      Ferry travel is governed by rules at a global level - defined by the International Maritime Organisation - so ferry companies have told us they don't expect to be impacted in the same way as coaches and rail travel.

      Brittany Ferries, for example, has published its timetables until November 2019.

  6. Travel insurance is unlikely to cover you for Brexit disruption

    If your journey's disrupted because of grounded planes or a Eurostar cancellation in the wake of Brexit, you might not be covered by a standard travel insurance policy.

    Some travel insurance policies only cover cancellations in a number of set scenarios, and Brexit isn't likely to be included in these.

    Holidaysafe are among the insurers that have told us that you WON'T be covered if your flight doesn't take off due to Brexit. Liverpool Victoria told us it will have more information in December.

    Direct Line said it covers delays, missed departures, and trip abandonment and this would still be the case if they happen as a result of Brexit. 

    Aviva told us it would depend on the circumstances. For example, if a customer was at the airport and had checked in to fly abroad and the flight was then cancelled or delayed for more than 24 hours, they would be able to claim. Yet if EU airspace was closed to air traffic, and as a result flights were cancelled, you wouldn’t be covered unless the customer had taken out the optional ‘airspace closure’ cover.

    Martin: 'Travelling around Brexit? It may be worth upgrading your policy'

    “If you are going to travel over that period, it may be worth upgrading your travel insurance to a premium policy (or getting a one-off policy) which provides cover in any scenario.

    "You are looking for something like a ‘cancellation any cause’ policy, meaning you'll be covered for anything which was unexpected at the time you purchased it.

    "We will soon add a section to our Travel insurance guide giving options."

  7. Worried about holiday currency? Hedge your bets and buy some sooner

    As Martin explains in his Buy euros now? blog (written in July, but still relevant now), currency moves are complex, and affected both by economics and the whims of City traders trying to second-guess those movements. So we don't know how the pound's going to move over the next few months - and anyone who tells you they do is a liar.

    If you're nervous, hedge your bets

    If you're really worried about the value of the pound going down and making next year's holiday unaffordable, you could try following what Martin's suggested in the past and buy roughly half what you need at today’s best rate, then half nearer the time.

    If you’re really nervous, you could ask yourself, “Would I be content with today’s euro rate for my holiday money…?” If so, and your real fear is that the rate worsens so your holiday would be unaffordable, play it safe and buy more than half now.

    But if you do that, it’s best to close your eyes afterwards. If the pound strengthens, you’d have been better off waiting - and you don’t want that knowledge to ruin your holiday.

    For the best rates, see our 19 cheapest ways to get travel money guide and Travel Money Max tool.

  8. You may have to roam like you are NOT at home (unless you're on Three)

    In June 2017, the current 'Roam Like at Home' rules were introduced across the EU (plus Liechenstein, Iceland and Norway). 

    This means when making calls or texts to anywhere in the EU, or using data in one of those countries, you use your UK allowance (or pay-as-you-go rates), subject to fair usage rules.

    Plus there is a a default €50 (£44) cap on data usage when you’re travelling anywhere in the world - not just within the EU. 

    These rules will continue to apply until 29 March 2019 - so you can use your mobile in Europe without incurring roaming fees until then.

    Post-Brexit, if a deal passes, then roam-like-at-home rules are set to continue during the transition period up to 2020, or beyond if this is extended. After that it depends on any future partnership arrangements. 

    However if there’s a no-deal, mobile phone operators would decide on a commercial basis – in other words free roaming across the EU could end.

    Of the big mobile providers, only Three has stated definitively that it won't reintroduce roaming charges in the event of no deal. EEO2 and Vodafone have only said they "hope" to preserve free-to-roam.

    There is one piece of good news though - the Government says if there's no deal it will legislate to keep the £45/mth default cap on roaming surcharges.

  9. Buying a package holiday from an EU company that targets Brits? You should still get the same protection

    Currently under EU law travel firms from outside the UK that target UK consumers have to provide protection to them in the event of their company going bust. 

    This will continue regardless after Brexit, as the Government says it will amend UK law so that EU traders selling package holidays or Linked Travel Arrangements in the UK, or specifically targeting these at customers in the UK, will be required to comply with the insolvency protection requirements.

    It has not yet made clear how it would define how a company would be deemed to have targeted UK consumers.

    It's worth bearing in mind though that consumers who purchase packages from EU-based traders which are not targeting business activities at the UK will not get the same protection - so you may need to check.

  10. Taking pets to Europe may get much harder

    Under the EU Pet Travel Scheme, owners of dogs, cats and ferrets can travel with their animals to and from EU countries provided they hold a valid EU pet passport. To get a passport pets must be taken to a vet before travel, microchipped and vaccinated against rabies. 

    Brexit may make it much harder to take your pet to Europe - though much depends on whether Prime Minister Theresa May's deal passes through parliament, so we don't yet know what's going to happen.

    If the deal with the EU is passed, there's likely to be little change for the first couple of years. After this, there will likely be some changes, although the full details haven't yet become clear.

    If the UK leaves the EU with no deal, the UK would by default become a 'third country' for the purposes of the EU Pet Travel Scheme.

    Pets would continue to be able to travel from the UK to the EU, but the requirements for documents and health checks would differ depending on what category of third country the UK becomes on the day we leave the EU.

    The UK Government's predicted a number of possible scenarios, ranging from you needing to prepare four months ahead and consult a vet, to very little change at all.

    Regardless, the government recommends pet owners contact their vet at least four months in advance of post-Brexit travel to check what they need to do.

    Those wishing to travel to the EU on 30 March 2019, for example, should discuss requirements with their vet as soon as possible and before the end of November 2018 at the latest. See the Gov.uk website for more info.

    • Most household pets aside from cats, dogs and ferrets aren't covered under one harmonised rule. So as is the case now, if you want to take one abroad, you'll have to comply with the national rules of the EU country you're going to. 

      The exception to this is horses. In a no-deal scenario it is possible that UK horse owners may not be able to take their horses into the EU at all, although the Government says it hopes to reach an agreement so that this doesn't happen.

  11. Driving in the EU? You may need a permit

    At the moment, if you have a UK driving licence you can drive in the EU without any extra documents. Whether that remains the case post-Brexit is likely to depend on whether we strike a deal with the EU.

    If Theresa May's proposed deal with the EU is passed, we don't know what exactly will happen, but the Government has previously told us it will try to negotiate a comprehensive agreement with the EU to ensure UK licences continue to be valid in the EU after Brexit. 

    If there's no deal with the EU, you may need to get a permitAccording to UK Government planning documents, if there's no overall deal with the EU, it will try and reach a separate agreement on driving documentation with individual countries. But if this isn't possible, your licence will not be valid and you may need an International Driving Permit (IDP).

    Currently these cost £5.50, and you'll need to get one before you travel from the Post Office. There are two types:

    The 1949 Convention IDP - valid in Ireland, Spain, Malta and Cyprus, lasts 12 months.
    The 1968 Convention IDP - valid in all other EU countries as well as Norway and Switzerland, lasts three years.

    If you're driving through multiple countries which require different types of IDP – for example, if you’re visiting both France and Spain – you’ll need to get both types of permit, meaning you'd pay £11 in total.

    If you have an EU driving licence but live in the UK, you won’t need to do anything – your license will still be valid without an IDP. 

  12. You may need to holiday without Spotify and Apple Music (and other subscription services)

    OK, so this may not be the first thing you think of when it comes to Brexit, but there are a whole host of smaller things which could change as a result of us leaving the EU.

    Government no-deal Brexit plans published in October warned that if no deal is reached with the EU, you may no longer be able to use your subscription account on services such as Spotify or Apple Music while travelling or staying in the EU.

    Under the EU-wide 'portability regulation', which was agreed in 2017 and has been in force since April this year, citizens can access accounts set up and based in one country while visiting other member states.

    But the Government's papers state: "The portability regulation will cease to apply to UK nationals when they travel to the EU". This means online content service providers will "not be required or able to offer cross-border access to UK consumers under the EU regulation".

    Spotify declined to comment and Apple hasn't responded to our requests for comment.

    Luckily, however, it appears Netflix won't be affected by the changes. A spokesperson for the subscription TV service said: "UK Netflix subscribers are able to access Netflix everywhere in the world that Netflix is available and will continue to do so once the UK leaves the EU."

    PS. Don't worry Eurovison fans...

    It's also worth noting that the UK will continue to be in the Eurovision song contest. Countries don't have to be part of the EU to enter - after all, if countries like Israel and Australia are in it, so can we be! 

Consumer rights and financial security

Much of the UK’s financial services legislation comes from EU directives. These allow banks and other financial services firms to offer banking, saving or lending services across the EU without needing to be regulated by each individual country's financial regulator.

Some of the most important consumer rights laws in the UK - such as the Consumer Rights Act, which provides protection when you buy goods online and in-store - are also based on EU directives.

Here's how the land will lie after we leave the European Union:

  1. You’ll still be protected up to £85,000 per person per financial institution with UK-regulated banks

    In the event a bank goes bust, at the moment the Financial Services Compensation Scheme means you are protected up to £85,000 per person per financial institution, provided that it is a UK-regulated bank. See Are your savings safe? for more info.

    Martin: 'Little is likely to change in this area'

    “Almost all main savings accounts are UK-regulated, including the likes of Santander (which has a Spanish parent company), ICICI (which has an Indian parent company) and the Bank of Cyprus. So they have full cover.

    "There is likely to be little change on this regardless of Brexit. The only thing that might change in the future is the amount. It is currently based on the EU rules which say all member states must give €100,000 protection. The UK amount does change occasionally due to currency moves.

    "Although not imminent, a few years after the UK leaves the EU the Bank of England is likely to make its own determination on the level of UK depositors' protection."

  2. RCI, Fidor and other EU banks which operate in the UK will be able to continue to do so for at least three years – but who protects your savings?

    Firms that are authorised in European Economic Area countries can offer most of their services in the UK under a system known as 'passporting' – where one EU member state can provide services to customers in other member states without having to get direct authorisation in the other states.

    It means that banks such as RCI Bank and Fidor Bank – regulated by the French and German regulators – are able to offer savings accounts to UK customers. Whether there's a Brexit deal or not, the Government proposes a 'Temporary Permissions Regime' after Brexit  that will allow firms already in the UK to continue to operate for three years. 

    There's also a consultation, which will close in December, about what will happen with the £85,000 per person protection available if an EU-regulated bank goes bust.

    In the meantime, some EU-regulated banks are applying for UK licences. RCI Bank for example told us it was in the process of obtaining a full UK banking licence, and says once it does this, protection will change from being provided by the French protection scheme scheme to the UK Financial Services Compensation Scheme.

    Martin: 'Think carefully about where you put your money'

    “EU-regulated banks will still be able to operate in the UK - the big question is who protects your savings in them.

    "Currently with these banks it is the overseas government. So in the unlikely event RCI Bank went bust you’d be reliant on the French government to pay you out (unless it does end up getting a UK licence). 

    “Who is responsible for the protection after Brexit is still being discussed. In a way, the best outcome for UK savers is that the UK takes over - more likely in the event of a 'no deal' than a deal.  

    "However if, once we leave the EU, you are still reliant on the overseas government to protect your savings, that is perhaps a less certain guarantee than from our own Government, which will want to protect voters. So think carefully about where you put your money."

  3. Sadly the rules for mortgage prisoners WON'T change immediately once we've left the EU

    10,000s of mortgage customers in the UK are currently stuck on expensive deals and are unable to move to cheaper ones.

    This is because an EU rule, called the Mortgage Credit Directive, means anyone getting a mortgage is subject to strict affordability checks scrutinising their incomings and outgoings, even if they already have a mortgage and are now applying for a cheaper one.

    Martin has previously said that although the EU has given us some powerful and strong financial protection for consumers, this directive "simply isn’t fit for purpose for the UK market and must stop". You can read more about that in his blog: I’m taking on the EU Mortgage Credit Directive – it’s going to create many mortgage prisoners.

    Immediately after we leave, everything will stay the same. Once we leave the European Union in March, UK law won't be required to follow the rules of the EU's directive, meaning lending criteria could be relaxed.

    However the EU regulations, often blamed for creating mortgage prisoners, have now been copied into UK law... which means there won't be any immediate change.

    Treasury Minister John Glen said in early November that the Government would consider amending the regulations in the future, so there is some hope, although no timeframe was given for this.

    Martin: 'Leaving the EU should be the opportunity to fix this'

    "The fact that some people are being rejected for a cheaper mortgage because ‘they can’t afford it’ is crackers.

    "This stems often from the UK interpretation of the EU credit directive that dictates affordability checks for those who are remortgaging, even if they're not borrowing more and they’ve never had problems.

    "I’ve lobbied hard on this over recent years. The EU said to me it was the UK interpretation of the act. The Financial Conduct Authority and Government said they had no choice, it was the directive. Who knows who was right.

    “Leaving the EU should give us the opportunity to fix this. My conversations with politicians and regulators indicate it won’t be that quick – there are plenty of things higher up their legislative agenda than changing the credit directive.

    "Yet after our recent mortgage prisoners debate event with the Economic Secretary to the Treasury at the Conservative party conference fringe (don’t worry, we’re independent - it was a debate) the issue is rising up the agenda, and I’m hopeful we’ll see some small moves that don’t require legislative change."

  4. Making payments to the EU could become slower and more expensive

    At the moment, UK-based payment service providers have access to central payments infrastructure such as the Single Euro Payments Area (SEPA), which allows customers to make cross-border payments at a relatively low cost, or sometimes for free.

    The Government hopes to come to some arrangement to stay in SEPA and says this would ensure lower value European transactions are processed in the same amount of time as they are today.

    But in a no deal scenario, access won't be continued. The Government says that customers could face increased costs and slower processing times for Euro transactions. 

    It also says that the cost of card payments between the UK and EU will likely increase, and these cross-border payments will no longer be covered by the surcharging ban, which prevents businesses from being able to charge consumers for using a specific payment method.

  5. Your basic consumer rights won't change - but seeking redress from EU traders may be tougher

    Some of the most important consumer rights laws in the UK, such as the Consumer Rights Act which provides protection when you buy goods online and in-store, are UK laws in their own right - so they won't change when we leave the EU, even though some of their content is based on EU directives.

    However, if you're buying from a trader based in the EU post-Brexit, things may get a bit trickier...

    EU consumer protection legislation ensures consumers across the EU can buy goods and services from other EU countries, knowing that the protections and safety standards are the same or similar in every EU member state.

    For example, if a UK consumer buys an item from an EU-based trader and the item does not arrive or there is a problem, the UK consumer can use UK law and the UK courts for redress, and judgment will be recognised in the EU member state in question.

    In the event of no deal, you won't be able to use UK courts to settle an issue with an EU trader - you'd have to go to a court in France, Germany or Italy etc instead.

What will the impact on EU citizens living in the UK be?

While Brexit will affect everyone in the UK, the most immediate direct impact will be on the 3.8 million people living here who are citizens of other EU countries.

If you're one of them, here's what you need to know:

  1. You'll have to apply to stay here after 2020

    If you're an EU citizen living in Britain, you won't have to leave when Britain leaves the EU on 29 March. In fact, you and your family will be able to continue living in the UK without doing anything until 31 December 2020.

    But if you want to stay beyond that, you'll have to apply for either 'settled' or 'pre-settled' status (unless you're an Irish citizen, or already have indefinite leave to enter or remain in the UK).

    • Settled status will be given to successful applicants who by the time they apply have been living in the UK for at least five years.

    • Pre-settled status will be given to successful applicants who won't have lived in the UK for five years by the time they apply.
    • Both settled and pre-settled status will mean you can live and work in the UK, enrol in education or continue studying, use the NHS, access benefits and pensions if eligible, and bring family members to the UK to stay long-term.

      If you get pre-settled status, you can:

      • Stay in the UK for a further five years from the date you get pre-settled status.
      • Apply for settled status as soon as you’ve lived in the UK for five years and spent at least six months of each year in the UK. You will not need to pay a fee.
      • Spend up to two years in a row outside the UK without losing your pre-settled status.

      If you get settled status, you can:
       

      • Stay in the UK for as long as you like.
      • Apply for British citizenship if you meet the requirements.
      • Spend up to five years in a row outside the UK without losing your settled status.
      • Your children will automatically become British citizens.

    Applications will open fully by 30 March 2019 and the deadline for applying will be 30 June 2021. You may be able to apply after this date if you’re joining a family member with settled or pre-settled status in the UK.

    Full details on what you'll need to apply can be found on the Government website, but in brief, you'll need information such as proof of identity and proof of residence in the UK. The usual fee to apply will be £65 if you’re 16 or over, or £32.50 if you’re under 16.

    If your application is not successful, you won't be able to stay in the UK - although you can appeal a decision and reapply.

What will the impact on UK citizens living in the EU be?

Right now, all UK citizens are also EU citizens, which means they can go live and work anywhere in the European Union - from Seville to Stockholm - without needing to apply for a visa. Many Brits take advantage of that, with an estimated 1.3 million living elsewhere in the EU.

If you do live abroad, here's what you need to know:

  1. If you already live in the EU or are moving there soon, it's expected you'll be able to stay beyond 2020

    Currently, UK citizens living elsewhere in the EU enjoy access to state pensions and healthcare.

    Under the current agreement between the EU and UK, you SHOULD be able to continue to live in another EU country as long as you move there before 31 December 2020 - but this isn't 100% guaranteed.

    The UK and EU have negotiated a 'citizens' rights agreement' which applies in this area, and is written into the proposed 'Withdrawal Agreement' that Theresa May has drawn up with the EU.

    Under this agreement, it's intended that during the period 30 March 2019 until 31 December 2020 - known to some as the transition or implementation period - UK nationals will be able to move to another EU member state as they can now.

    If you do so before the end of 2020, you should then be able to continue living in your new country of residence, enjoying the same rights to healthcare, benefits and pensions as you do now. You may required to apply for residence status in the country you're resident in though

    If you want to move to the EU after 31 December 2020, whether you can do so and your rights will depend on the outcome of the negotiations between the UK and the EU.

    For full information, you'll need to go to the government of the EU country that you live or plan to live in, though there are more details on the UK Government website, including Living In Guides.

    It's worth noting that while what's outlined above isn't supposed to be dependent on the UK agreeing a wider deal with the EU, the UK Government's also told us it "can't legislate" for foreign governments.

    So there's no absolute guarantee that the rules above will be followed. In the unlikely event they aren't, it's hard to predict what will happen - you'd have to approach the government of the member state you live in, or intend to live in.

  2. Planning to study abroad? You'll still be able to get Erasmus+ funding until the end of 2020

    Erasmus+ is a programme for education, training, youth and sport. The best-known aspect of it is the university exchange programme, which allows students from the UK to study at European institutions for a year during their degree.

    Eligible students receive an Erasmus+ grant provided by the European Commission - this is paid through your institution. This grant contributes towards the extra costs that you may encounter from studying abroad

    After 2020, the UK's continued participation in the scheme depends entirely on any deal it agrees with the EU.

    But even in the event of no deal, funding will be covered until the end of 2020, as the UK Government says it will cover the payment of awards to UK applicants for all successful Erasmus+ bids submitted before the UK exits the EU, and afterwards, until the end of that year.

    Erasmus+'s UK wing says it is seeking to agree with the Commission practical arrangements to ensure that UK students can complete their exchange in a ‘no deal’ scenario without problems.

This is the first incarnation of this guide. Let us know what questions you have about Brexit - and give us your feedback on this guide - in the Brexit need-to-knows forum thread.

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