Scottish Indpendence - Personal Finance Implications

polyphonic99

Since we now know there will be a vote on Scottish Independence in 2014, would it be wise to avoid making any savings, investments or starting a pension in any Scottish companies for residents in the UK who live outside of Scotland.

If the people who live in Scotland vote for independence we don't know what currency they will use, the exchange rate if it is not £Sterling, how they will be regulated, how good their deposit protection scheme might be (like the UK or like Iceland), how safe their financial services sector might be considering the population it would serve would drop from 62 million to around 5 million.

The question extends to people who already have long term investment products and pensions with companies like Standard Life, Scottish Widows etc, but who don't live in Scotland. How will they be affected.

I ask because I live in England, therefore have no vote, but have a pension fund managed by a Scottish company. I don't know whether to move it now or wait for the vote, but I haven't seen or heard any discussion of the personal finance issues that Scottish Independence raises to UK citizens by either politicians or the media, and obviously it could seriously affect your situation.

Optimist

Something I have been thinking about as I have several accounts with financial companies who are based in Scotland.

There is however no information on how these will be treated assuming independence becomes a reality. Not even, will Scottish based banks still be covered by the FSA Compensation scheme or not.

I intend to wait and see if the vote goes for independence and if it looks likely I will seriously consider moving my accounts back into a company which is based in what is left of the UK.

Sceptic001

You raise some interesting issues, polyphonic99, for which there seem to be no definitive answers.

This is surprising since the SNP has been campaigning for independence for decades, but seems to have neglected to think through the detailed ramifications. The blanket response since the 1970s has been that oil revenues will cover everything, but this assumes that a) Scotland will get all or most of the oil revenue (improbable); and b) that the oil revenue will last forever (impossible).

Back to the McDrawing board, perhaps?

atush

I would keep a weather eye on it for sure, but I don't see it going ahead personally.

opinions4u

The main issue would be currency change.

And I can't see them jumping into the Euro with any haste in the unlikely event of voters wanting independence.

Sceptic001

opinions4u wrote: »

The main issue would be currency change.

And I can't see them jumping into the Euro with any haste in the unlikely event of voters wanting independence.

The deep irony is that, although the stated policy is to keep sterling, this falls foul of EU treaty requirements, which would force Scotland to adopt the euro as a condition of continued membership (if the Commission chooses to enforce it). So much for independence!

The Scottish government has taken legal advice on this, but is refusing to publish it, which does not augur well. The EU has not publicly expressed an opinion, but is thought to be wary of any kind of secessionist activity as it could have serious implications in other parts of the EU, notably Catalonia, which could seriously destabilize Spain.

black_taxi_2

as a scot

More chance winning World Cup than independence

snp hav switched from sterling to euro to sterling

best case scenario is £500 a year better off

I'm not risking the union for 500 Jaffa cakes

pqrdef

Other foreign banks operating in the UK have set up UK subsidiaries under UK regulation. I'd expect Scottish companies wanting to operate in England to do something similar. Halifax could become Bank of Scotland (England and Wales) plc.

FLAPJACK

An issue certainly to keep an eye on.

Looking at it though when you think of major things like free prescriptions, free care for the elderly, upkeep of the roads etc.....it is a large expense for Scotland to bear on its own.
I doubt if it all could be paid for by taxation in Scotland...does independence therefore mean higher taxes for the Scots? (Turkeys votings for xmas comes to mind).

Hopefully the Scottish population will be asking a lot of questions before they vote.

In the meantime we need to be vigilant about the implications for savers/investors South of the border as mentioned by the OP

black_taxi_2

there are some in snp that don't want independence just more powers

someone

It does seem poorly thought out. These are questions which have a real impact on day to day lives of not just the Scottish but also the rest of the UK.

IMO if there was a yes vote it will end up been very messy, very expensive and no doubt might even fail.