The details of how the UK will now interact with the EU will slowly emerge, and here at www.expatnetwork.com we will regularly update you on the latest news on how Brexit will affect you as an expat.
As a first step, here is what we already know about how Brexit will affect different people:
British Workers In EU
British workers already on assignment or fully employed in an EU member state are currently unlikely to see any difference in how they are treated.
But working in the EU could in the future become more difficult for UK expats. They may no longer have an automatic right to work in another EU State – they may be forced to apply for a Blue Card.
The EU Blue Card scheme is designed to make Europe a more attractive destination for professionals from outside the European Union.
Highly qualified people have opted in the past for destinations such as the United States, Canada or Australia. The European Blue Card initiative is designed to help Europe become the world’s favourite migration destination:
- Working and salary conditions equal to nationals
- Free movement within the Schengen area
- Entitlement to a series of socio-economic rights (e.g. unemployment benefit)
- Favourable conditions for family reunification
- Permanent residence perspective
- Freedom of association.
But while making the EU a more attractive working destination, the Blue Card may not be granted to everyone from the UK who wants to work in the UK post-Brexit.
Three key conditions are to be met in order to request the EU Blue Card.
- Non-EU citizenship
- Educated or skilled
- Work contract or binding job offer.
Most UK contractors heading for the EU will meet these conditions, but those heading off speculatively for work may find it much more difficult. There is also the rule which may be applied to UK nationals: 15 EU member states say that you can only be hired if no other suitable candidate has been found in the EU area.
British Retirees/ Owners Of Property In EU
Many British expats own property in Europe or are thinking of doing so. It is highly unlikely that they will be unable to continue to do so. But there may be changes to inheritance and tax laws which may make owning property in the EU less attractive.
UK retirees in the EU may face falls in the value of their pensions. There are 1.1 million British expat pensioners globally and currency transfer company HiFX estimates that they are paid £6.2bn in annual state pensions collectively. Of these British pensioners who have retired overseas, approximately 400,000 claim pensions in the eurozone, and should sterling sustain its fall against the euro, say by 15 per cent, maximum annual state pensions risk falling in value from €7,215.24 by over €1,000 to €6,184.56.
Of course, the fall in the pound’s value may only be temporary, but should it continue this may be a concern for those with income in pounds and expenditure in euros.
UK Savers And Investors
David Tinsley, UK economist at UBS, said Brexit meant “sharply lower growth, a large drop in the pound, and further easing from the Bank of England.” He expects two rate cuts from the central bank over the next six months, taking base rates down from 0.5% to zero. Those with sterling funds in onshore and offshore banks will see the interest they are paid on their savings fall substantially, from already low levels.
HIFX estimates that the quarter of a million Britons who have retired to Australia could see the value of their pensions decrease by more than $1,600 annually as the UK parts ways with Europe, and those in America could see losses totalling in excess of $1,400 every year. Again, though, the pound’s fall could only be temporary.
The UK stock market, as measured by the FTSE-100 index, expectedly fell spectacularly upon the Brexit outcome. But this was short-lived and it is difficult to predict how the market – and investors – will react when the news is properly digested.
Richard Stone, chief executive of The Share Centre, said: “The decision of the UK electorate to vote to leave the EU caused turbulence in the market as expected. We anticipated the market would fall and sterling would suffer – both of which happened.
“We expected that the negative short-term outlook may be short-lived as the markets realised the positive benefits of a lower exchange rate for exporters and those with overseas earnings, as well as investors being more discriminating between those companies which will genuinely be affected and those which have been written down by the market as a result of sentiment rather than fundamentals.”