How are personal finances affected by Brexit uncertainty and what we can do about it?

How are we feeling about the impact of Brexit on our personal finances?

Uncertainty around Brexit has caused more of us to worry about our financial situation in a post-Brexit world – increasingly so, with more than one in three people in Great Britain (36 per cent) expecting their finances to worsen after Brexit, according to a YouGov survey on behalf of Royal London.

Only 6 per cent of the population is optimistic that Brexit will lead to an improvement in their personal finances.

That’s six times as many people who are feeling pessimistic rather than optimistic across Great Britain as a whole.

The level of pessimism has increased since Royal London began tracking Brexit sentiment a little less than a year ago. There has been a similar increase in the proportion of people who expect things will stay the same. Meanwhile optimism has declined. There has been a decrease in the number of people who say they “don’t know”, suggesting people are becoming more certain that there will be an impact on their finances, one way or another.

In this report, we look at the state of the nation’s finances in the final 30 days before Brexit (October 31); how money worries have risen in the last 12 months specifically as a result of Brexit uncertainty and what as individuals, we can do to take back control of our own financial wellbeing.

Are we already taking action?

On the whole, no.

More of us have changed something about our finances as Brexit draws nearer, with 11 per cent saying they had already made changes, up from 8 per cent six months’ ago. Men were more likely to say they had made changes than women.

But we are not all feeling equally worried and prone to act, with 82 per cent of people saying they had not yet made any changes.

Among those that have made changes, a reduction in spending, an increase in savings and a decision not to go on holiday were the top responses to the question: “Which, if any, of the following changes have you already made?”

Here is what some respondents who said they had made ‘other’ changes said they had done:

• “Arranged more borrowing”
• “Avoided selling shares due to uncertainty”
• “Bought items that are imported from other EU countries before the price rises”
• “Bulk buying food and seeds to produce my own food”
• “Changed investment balance”
• “Changed jobs and now get my salary in euros”
• “Changed my investments”
• “Changed my pension funds to cash”
• “Changed to a higher paying job to save”
• “Chose fixed mortgage period to avoid brexit”
• “Delayed buying a house/getting a mortgage.”
• “Digging up the lawn to plant vegetables”
• “Going straight to uni for a more employable job for fear of a recession”
• “Got a redundancy insurance”
• “Held off paying debt in other currencies”
• “Held on to foreign currency and been more cautious about committing myself to investments.”
• “Invested outside the UK”
• “Kept dollars”
• “Looked at moving abroad”
• “Moved assets”
• “Moved equities into bonds”
• “Moved investments into safer funds”
• “Moved the a fixed rate mortgage”
• “Moving abroad”
• “Not buying a new car”
• “Paid off mortgage”
• “Purchased house abroad”
• “Putting off major spending so I can see what happens first”
• “Savings in long term rates”
• “Spread investment globally”
• “Stockpiling food and medicine”
• “Stockpiling non-perishable food items”
• “Transferred investments to the EU”
• “Trying to pay off credit card faster”

Has Brexit caused delays to big financial decisions?

Around ten million Brits – 19 per cent of the population, have put off making a big financial decision as a result of Brexit, up from 16 per cent reporting that they had delayed a big decision three months’ ago.

 There were increases in the number who had delayed buying a home to 34 per cent of those who had delayed a big decision (up from 29 per cent of those who had delayed a decision last quarter to 34 per cent, or 2.7 million people).

The proportion of those eight million delaying a holiday fell from 46 per cent in February to 38 per cent, perhaps reflecting a seasonal dip in holiday buying, while the proportion delaying a car purchase was 23 per cent.

The proportion of those who have put off a decision to retire is 10 per cent of those delaying a big decision, equivalent to around 950,000 people, based on Royal London analysis of ONS data.

Table 1.6: Have people put off big financial decisions?

*Source: YouGov, Royal London