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How to protect savings from possible GBP crash after Brexit?
Comments
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As you and your family are planning to relocate to your home country (your wife and daughter now, you in a year or two):-
https://forums.moneysavingexpert.com/discussion/comment/75670610#Comment_75670610
...then clearly the sensible thing is to start transferring your assets to your home country.
When you do it, and whether in one lump or spread over a period of time, is something which depends on how much of a gambler you are:- nobody on a forum like this can predict for certain what will happen next.
Why do you think the Pound will "crash" after Brexit, and however do you define "crash"?
Ideally I would invest in stock market in chunks but it's at its peak so don't want to risk it now.
I am not saying pound will crash but MAY crash. There is nothing wrong in exploring possibilities I guess.0 -
Its difficult to predict such things. If we have a confirmatory referendum and just 'call the whole thing off' then the pound may well rally. A cautious approach maybe to split the difference - 50:50.0
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If your savings are in GBP and the GBP crashes then your savings are still worth exactly the same. "The pound in your pocket is unchanged"
If you meant investments rather than savings then there are options but Brexit has been known for some time
What are the typical charges, costs ( one time and annual etc) please?0 -
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Thrugelmir wrote: »What's the correlation between Brexit and your home country currency?0
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That is what Harold Wilson said when he devalued the pound in 1967. It was nonsense then and it is nonsense now. The real value of the pound will fall if it depreciates as imports will be more expensive.
Not really relevant to ordinary folk who just use their money in their own country though.0 -
parking_question_chap wrote: »If your savings are in GBP and the GBP crashes then your savings are still worth exactly the same. "The pound in your pocket is unchanged"
Not really relevant to ordinary folk who just use their money in their own country though.
Do those ordinary folk not buy any imported products, or spend any portion of their wealth on goods or services where an element of the cost is linked to overseas foreign currency rates?
The bag of oranges imported from Spain. The washing machine from Japan. The dishwasher from Germany. The sofa from Italy. The toilet roll made in the UK but delivered to the corner shop from the local cash and carry in a transit van assembled in Romania using fuel whose price is linked to the global oil price. The till at the shop has a barcode scanner made in China and the proprietor's operating costs feed into the overall price for the basket of goods. When you get the loo rolls home you stick them in a cupboard designed in Sweden and built in Vietnam. You watch a downloaded movie from Hollywood or Bollywood, having checked out the online reviews on your Korean smartphone.
To go with the movie you treat yourself to a takeaway curry, now 50p more expensive because one of the guys who works the kitchen needed to get paid enough to buy a flight to Bangladesh and have some local spending money when attending a family event there, so his boss helped him out and put the prices up to cover it. It's a lamb curry and the lamb from New Zealand is great at that time of year. Your hairdresser sets her price in pounds partially based on the fact that she's sending a little money back to her Mum in Hungary and a pound no longer goes so far there, and your Uzbeki gardener and Colombian cleaner and Polish decorator think likewise.
So across our daily lives the person using 'their own money in their own country' is exposed to explicit or implicit pricing structures which are driven by the relative values of the pound against the Euro, Yen, Leu, Renminbi, Krona, Dong, USD, Rupee, Won, Forint, Peso, Taka, NZ dollar etc.
When you go to the shop for your loaf of bread maybe its a jolly tasty artisan loaf made by your local baker (who doesn't have a foreign car or smartphone or imported equipment or ingredients, or watch movies or use restaurants that import groceries, travel in a gas-guzzling foreign-assembled motor vehicle or ever buy services from anyone with foreign connections). He just grows his own British wheat with good old British fertiliser , harvests it and makes really good bread with the output and somehow he doesn't have any foreign cost component driving the amount he wants to get paid for baking the loaf.
However, the loaves are nice, and he can only make a certain number per day. If you want one, your pounds will be competing with the pounds of your neighbours to set the market price for the wholly British loaf coming out of the wholly British oven.
You'd like to pay £2 because that's how far your retirement savings will stretch. The neighbours on your street are retired too, but within their wealth planning over the last couple of decades they held ISAs and pensions which like most people's were invested in a diversified manner across both UK and foreign equities and bonds. As a consequence of a 10% weakening of the pound while they held the foreign assets, they can afford £2.20 for the bread instead of £2.
So the baker sells his British bread to everyone on your street except you, because you put your head in the sand and didn't keep up with the Joneses when they suggested using a diversified pool of assets to see them through the rest of their days.
Superficially, you perhaps only spend pounds on your goods and services in British shops, that's what the receipt says, and never holiday abroad so you didn't realise you should be holding any foreign assets or investments. This doesn't at all mean that the idea of being diversified is only for currency speculators. Far from it. The average person who is auto enrolled into some cheap simple NEST pension or whatever would get some overseas investment exposure in his default fund choice without necessarily recognising that's what was happening.0 -
Just to complicate... it's likely that your home currency to GBP is a cross rate, which means that any conversion will go via USD anyway, so actually you should be looking at GBP/USD + USD/ Home CCY as two separate legs.0
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