1.8m British Expats at Risk of Another Sharp Drop in Pound Sterling and Financial System Disruptions: de Vere

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An estimated 1.8 million British expats living in the EU should consider reviewing their personal financial strategies as ‘no-deal’ Brexit looks increasingly likely according to one of the world’s largest independent financial advisory organisation.

deVere Group say a 'no deal' Brexit is now expected by a growing number of experts and the wider population to be the most likely outcome.

The warning from deVere Group comes after British Prime Minister Theresa May claimed that a no-deal Brexit “wouldn’t be the end of the world” and the publishing by the UK government last week of its first technical notices advising businesses and consumers on the preparations being done for the prospect of there being 'no  deal' Brexit.

According to de Vere, if the UK crashes out of Europe with no deal in place, the estimated 1.8 million expats living in the EU could be financially impacted in two key ways:

First, the pound would inevitably suffer and it could fall hard.

"This would deliver another heavy and serious blow for those who receive UK pensions or income in pounds as the cost of living, in effect, would be significantly more expensive," says James Green, deVere Group’s divisional manager of Western Europe.

Secondly, "unless there is considerable post-Brexit collaboration between the UK and EU there is a risk that existing payments from British companies, including pension and insurance companies, to those living within the European Economic Area (EEA) could be disrupted or even made impossible. Of course, this would be a major inconvenience to many UK expats," says Green.

The advice from Green is for expats to ensure they have considered putting in place a financial 'strategy' to protect against downside risks.

“Against this chaotic backdrop it is prudent that British expats in the EU consider reviewing their personal financial strategies sooner rather than later with a cross-border financial expert. This will help best position them not only to mitigate the risks of a no-deal Brexit, but also to enable them to take advantage of potential opportunities that may arise.”

The warnings do however come in the wake of a notable bounce in Sterling relative to the Euro following a number of positive developments regarding Brexit negotiations.

The British Pound has surged higher against a host of major currencies mid-week following comments from chief EU Brexit negotiator Michel Barnier that "the EU is preparing to offer a partnership with Britain such has never been with any third country."

The comments were made alongside Germany's foreign minister Heiko Maas and will go some way to calm market fears that the EU and UK are headed for a 'no deal' Brexit scenario.

"That kind of bullishness has been in short supply of late – if it has ever been there at all – and had a hugely rejuvenating effect on the Pound," says Connor Campbell, market analyst with Spreadex.

But, Green is not so optimistic and argues, “unfortunately, a smooth and orderly exit of the EU is looking increasingly unlikely and this can be expected to hit the finances of many expats. They should seek to make their financial strategies ‘no deal Brexit’ proof.”

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