Intending to move aboard - savings exchange rate through next year

smunnky

Hello folks,

I've had a search around the forums but not found quite enough to use in decision making. Help and advice from the expertise in this forum would much appreciated.

I have been saving over the past few years, with the intention of either putting down a deposit on a house or funding a move abroad.

Having made the decision to move out of the UK next year, most likely to Europe, I now find myself worrying about how far the substantial savings I have made will go.

With the way the pandemic and Brexit are panning out, I don't think it's controversial to expect the UK economy is going to suffer early next year, particularly in relation to other countries in Europe.

I'm considering moving my savings to a foreign currency account before the end of 2020, to try and mitigate any losses to their relative worth.

I realise this is a hugely privileged position to be in - to even have savings or be able to consider moving right now - but the feeling of a small window in which to do something for my future before it's too late is causing some stress.

In particular I'd really appreciate help with:-

• resources or further reading I can refer to;
• which factors I should be considering in making a good decision;
• understanding the risks involved / potential pitfalls;
• alternative options I've not considered.
  

Thank you.

Another_Saver

smunnky said:

Hello folks,

I've had a search around the forums but not found quite enough to use in decision making. Help and advice from the expertise in this forum would much appreciated.

I have been saving over the past few years, with the intention of either putting down a deposit on a house or funding a move abroad.

Having made the decision to move out of the UK next year, most likely to Europe, I now find myself worrying about how far the substantial savings I have made will go.

With the way the pandemic and Brexit are panning out, I don't think it's controversial to expect the UK economy is going to suffer early next year, particularly in relation to other countries in Europe.

I'm considering moving my savings to a foreign currency account before the end of 2020, to try and mitigate any losses to their relative worth.

I realise this is a hugely privileged position to be in - to even have savings or be able to consider moving right now - but the feeling of a small window in which to do something for my future before it's too late is causing some stress.

In particular I'd really appreciate help with:-

• resources or further reading I can refer to;
• which factors I should be considering in making a good decision;
• understanding the risks involved / potential pitfalls;
• alternative options I've not considered.
  

Thank you.

No one knows.
Literally no one knows.
It's not even worth trying.

If you're happy with what the current exchange rate will get you in €, and you're emigrating anyway, go for it.
If you're unsure, you could always convert half now and half later.

kazwookie

Personally I think the whole of Europe  / rest of the world is going to suffer in one way or another with jobs/ CV-19 / exchange rates / brexit/ political dramas of one sort or another.

I really don't think any where in Europe is going to be better than here atm.

Personally I would stick tight and do nothing for at least the next year to year and a half.

Albermarle

If a UK /EU Brexit deal is announced in the next few days , the Pound will probably improve against the Euro a little .
. A successful deal is already priced in as the most likely result , so if it is no deal it will almost certainly fall.
If it was me I would do what Another Saver said  you could always convert half now and half later.
To hedge your bets 

Sunnylifeover50plan

Which country in Europe are you considering?
I live in Spain and they have a specific national level regime when it comes to tax along with a degree of additional local taxation which differ across the country such as stamp duty on property purchases - so there isn't a common EU wide approach or even a common in country approach. It's not easy to understand.
I've kept an open mind on gbpeur rate and maintain relatively modest cash balances in the UK and Spain but with the majority of what we have in SIPP wrappers denominated in GBP plus we bought a not too expensive house outright. Spain will not recognise the initial tax free element of a UK pension if you are tax resident there. The personal tax allowances are also much lower than the UK equivalents. We do not work but haven't bet against the UK given the local economies here have been devastated by covid after the collapse of tourism.
If you have UK assets to sell down, before your move, including a UK house sale try and think about concluding these before you become tax resident in your chosen destination given possible CGT considerations. In Spain you normally become tax resident after 183 days in country.
Think about healthcare costs if under state retirement age as it will likely be private and considers pre existing conditions.
UK emigrants might also find residency fiscal tests are enhanced once UK nationals become 3rd country migrants along with there not being the protections around UK state pension uplift if you didn't conclude your move before the end of the transition period. Not sure what the S1 conditions are after end of the year if you are not resident by then.
You might also not have the right to exchange your UK driving license for a local one after the end of the year and might need to retake your driving test locally.
Think about local death taxes as they often differ from the UK approach  - we have a Spanish will for our Spanish assets and a UK one for everything else.
We decided for us a move during the transition period made more sense. We use a local firm of lawyers/ tax advisors to handle our Spanish tax and declarations.

eskbanker

smunnky said:

With the way the pandemic and Brexit are panning out, I don't think it's controversial to expect the UK economy is going to suffer early next year, particularly in relation to other countries in Europe.

It's an opinion, but other opinions exist, so don't kid yourself that it's a one-way bet, especially if you'd be planning to stake a significant pot on your ability to speculate on currency movements....

colsten

I have no opinion on the direction the exchange rate will take. I'd just like to suggest that if you plan to move in the near future, you will be in a significantly better position in terms of citizen rights if you formally register in your country of choice before the end of the transition period, i.e. before the end of the month. Whether this is still achievable is a different question but here is a website with practical explanations: https://www.britishineurope.org/page/1016540-explanatory-guides?

Thrugelmir

 smunnky said:

With the way the pandemic and Brexit are panning out, I don't think it's controversial to expect the UK economy is going to suffer early next year, particularly in relation to other countries in Europe.

 Weaker £ helps UK exporters. There's two sides to every coin. Countries within Europe will have fared differently. The only one that matters is the one you plan to move to. 

gfplux

I assume you are a British passport holder.
Any Brit moving to one of the EU27 countries before December 31st this year will be protected by the withdrawal agreement (WA)
Moving next year will mean you will no longer be treated as an EU citizen but with be considered a third country national (TCN) There are rules already in place for TCN’s which include, proving an income sufficient you will not be a burden on the country, full medical insurance, a police check etc etc. You would normally have to apply at the chosen countries Embassy or consulate in the UK before departure.
The exchange rate may be the smallest of your problems.
Good Luck.