From house prices and mortgages to visas and roaming charges - what will happen when the UK finally leaves the EU?
12-13-2020
From house prices and mortgages to visas and roaming charges - what will happen when the UK finally leaves the EU?
By Amy Farnworth @FarnworthAmy
Digital Reporter
From house prices and mortgages to visas and roaming charges - what will happen when the UK finally leaves the EU?
At the end of December, the UK will finally leave the EU.
But whether we leave with or without a deal and what that means for everything from travel and consumer rights to property prices is still a little bit up in the air.
However, Martin Lewis's Money Saving Expert has come to the rescue once again with some tips and advice, but has warned that much is likely to change in the next few days.
What can we expect for the economy?
Martin Lewis said that when it comes to the economy and house prices, Brexit is not the only issue to affect the economy - we are in the midst of a worldwide pandemic, which has had economic consequences on a scale not seen for hundreds of years.
The long-term economic impact of deal or no deal is uncertain.
Yet when it comes to the short term, it's likely that the markets in their widest sense have factored much of the Brexit impact into prices already – that includes the rate of the pound against other currencies, share prices, bond and interest rates.
On the day when we get final confirmation of deal or no deal, there is likely to be some movement, though probably not seismic.
What about property prices?
After the Brexit vote in 2016, there were fears a house price crisis could be on the cards and the Bank of England warned in 2018 that a no-deal Brexit could lead to the economy shrinking and house prices falling by close to 30 percent.
However, once the withdrawal deal was agreed, predictions became more optimistic.
At the moment the stamp-duty holiday until March 2021 is driving house prices, with the housing market seeing a 7.6 percent rise over the past year.
Whether the stamp duty cut has actually been of benefit is debatable, but for now Brexit is secondary to the effects of the current pandemic and whether or not the stamp-duty holiday will be extended.
The Bank of England dropped the base rate – its official borrowing rate – to 0.25 percent in the wake of the EU referendum but since then the base rate has risen, although only up to 0.75 percent.
Now, due to the pandemic it's at its lowest rate in history, just 0.1 percent.
The talk is now of the risk of negative interest rates and Brexit is likely to feed into this – yet even if it has a short-term negative economic impact, as most economists predict, its impact is still for now likely dwarfed by Covid's, and negative rates are still a possibility more than a probability.
Martin Lewis says: "So my view is, rather than trying to second-guess economic shifts, the safest approach may be to simply focus on your own personal finances, which are more controllable and predictable.
"Plan for the worst; hope for the best.
"Ensure you've the cheapest mortgage and the top savings accounts and do a money makeover."
What does Brexit mean for travel to the EU?
The impact of coronavirus on travel this year has been massive, and is still likely to be by far the biggest issue at the start of January.
Yet Brexit will undeniably mean big changes – before Brexit and during the transition period, UK citizens could travel, live, holiday and work anywhere in the EU without any special permits, and that will soon no longer be the case.
Here are the Brexit travel need-to-knows:
Travel disruption in January is likely to be due to coronavirus not Brexit – but there may be teething problems when new rules come in.
Right now, there's huge uncertainty over whether the UK will be able to agree a trade deal with the EU by 31 December.
But deal or no deal, now a more orderly Brexit is in motion it seems less likely that the end of the transition agreement will result in significant disruption to international travel come 1 January 2021.
The caveat to this is that Brexit may result in the EU placing restrictions on travel from the UK due to coronavirus.
Due to the pandemic, EU countries, as well as Iceland, Lichtenstein, Norway, Switzerland, have put a ban on most non-EU residents visiting unless there is a strong case to allow them in, for example it's imperative for family reasons or if they're a healthcare professional. Another exception is for those travelling from countries with low coronavirus cases, such as Australia and New Zealand. A full list of valid exemptions can be found on the EU website.
But it's feared UK travellers could be banned because of its high number of coronavirus cases - and whether or not a Brexit trade deal is agreed is unlikely to affect this.
The Council of the European Union will decide whether to have an exemption for Brits by the end of the year and will review the situation regularly after this, but individual countries are allowed to set their own rules as well - which means they could decide to allow Brits in - so this is still very much up in the air.
Flight delay compensation rules won't change – EU rules have been written into UK law
If you're on a flight to or from an EU country which – due to the airline's fault – is delayed by more than three hours or your flight is cancelled altogether, under EU rule 261/2004 you're entitled to between £110 and £540 per person in compensation.
This hasn't changed as a result of Brexit, as EU rules will continue to apply to the UK until the end of the year.
But even after that, the Government insists flight delay compensation rules will remain the same, deal or no deal, as it's written EU261 into UK law.
It's also worth bearing in mind that if you fly between two EU countries after Brexit, you'll still be covered under EU261, as the law doesn't require you to be an EU citizen to claim compensation.
Next year you may face stricter border checks – and from 2022, you'll have to buy a £6 visa-waiver for EU holidays
During the transition period from 31 January to 31 December this year, UK nationals have been able to continue travelling to and working in the EU exactly as they do now.
However, there will be changes from next year – and the following are all set to happen whether or not there's a trade deal, though things could always change in future:
From January 1 2021, you may face stricter border checks. UK nationals have been warned they may need to show a return or onward ticket on arrival, show they have enough money to stay and use separate lanes from citizens of the EU, Iceland, Liechtenstein, Norway and Switzerland when queuing.
From 2022, you'll have to buy a £6 visa-waiver for holidays and short stays. UK nationals WON'T need a visa for short trips to EU countries (up to 90 days in any 180-day period) if they're just going on holiday. But they WILL have to fork out for what's known as a 'visa-waiver' – this'll cost €7 (£6.28) and will be issued under the 'European Travel Information and Authorisation System'.
You don't have to pay this for every trip, though: the fee covers an electronic pass that will allow British citizens to go on short holidays over a period of three years before they have to renew. The pass is similar to the ESTA currently required to visit the United States (see our ESTA guide for full info on how that works).
From 2021 onwards you may need extra documents to work or study, or for trips longer than 90 days. Details of this have yet to be confirmed and it will likely depend on what you're doing and where you're going. But those going to work or study abroad, plus those just going on business trips, may be affected from January 1 2021 onwards
You'll have to check with the embassy of the country where you plan to travel for what type of documents, if any, you will need.
If you're going to Ireland – you WON'T need extra documents when travelling there, even for work or study, and will continue to be able to visit in the same way as you can now.
Passports are turning blue
You don't need to get a new passport straightaway though, and can continue to use your current one as normal until it's close to its expiry date
Visiting the EU next year? You'll need at least six months left on your passport – so may need to renew early
Pre-Brexit, you could travel to EU countries on your passport right up to the point it expires – and that's continued to be the case this year, and will be until the end of the transition period on 31 December.
The rules will change next year though and from January 1 2021, when you visit most EU countries and Iceland, Liechtenstein, Norway and Switzerland, your passport will need to have at least six months left on it until expiry and be less than 10 years old on the day you travel.
EHICs are set to be scrapped for most – so make sure you've travel insurance cover
The European Health Insurance Card (EHIC) entitles most Brits to the same treatment at state-run hospitals and GPs that locals are entitled to, at the same cost, when travelling in the EU (plus Iceland, Liechtenstein, Norway and Switzerland and some overseas territories – see our country-by-country EHIC guide).
However, as of Janury 1 it will be scrapped, although the Government says it is discussing how UK nationals may access healthcare in future – including the EHIC – with the EU.
This isn't directly part of the trade talks though, so the outcome's not necessarily linked to whether we do or don't get a deal.
As things stand, and unless things change, EHICs won't be valid for most UK nationals if they travel from January 1 onwards. (If you're on a trip that started before 1 January, you'll be able to keep using your UK-issued EHIC until your trip ends.)
So in the meantime if you are travelling it's crucial to make sure you have sufficient travel insurance.
Some including expat pensioners and EU nationals in the UK may still be covered – but if so, you may need to apply for a new EHIC
Martin Lewis sayd that although we don't yet know what, if anything, will replace the EHIC for most Brits, we do know – regardless of the outcome of the trade negotiations – that there are some people who qualify to keep their existing healthcare rights under the withdrawal agreement signed by the UK and EU.
The people in this situation are:
- European Economic Area (the EU plus Iceland, Liechtenstein and Norway) or Swiss nationals living in the UK on 31 December 2020.
- UK state pensioners living in the European Economic Area (EEA) or Switzerland on 31 December 2020.
- UK students studying in the EEA or Switzerland on 31 December 2020.
- People who are 'frontier workers' (ie, EEA or Swiss citizens employed or self-employed in the UK but who live elsewhere) on 31 December 2020, for as long as they continue to be covered by the withdrawal agreement.
If you're in this situation and currently have a UK-issued EHIC then the Government says you should apply for a new EHIC, regardless of the expiry date on your current one – it's warned your current EHIC may stop being valid on December 31.
What about holiday currency? Best to buy some sooner
Currency moves are complex, and no one knows if the pound will be stronger or weaker in future – or what the impact of the end of the transition period will be.
However, if you're really worried about the value of the pound going down to make your holidays unaffordable, you could buy roughly half of what you need at today's best rate, then half nearer the time.
The big mobile providers say they've 'no plans' to bring back roaming charges next year – but they could
From January 1, whether or not a trade deal's agreed, the guarantee of free mobile roaming is set to end – so mobile providers are able to charge if they wish.
Martin Lewis checked with the big four firms and found none had yet decided to reintroduce charges.
Three told MSE it won't be bringing back roaming fees, while EE, O2 and Vodafone said they have "no plans to do so" but didn't directly rule it out.
However, you'll need to check with your provider to be sure – and of course, even if they don't charge on January 1 they may decide to reintroduce roaming fees in due course.
The EU's cap on unexpected data use, to protect travellers from huge unexpected mobile bills has been written into UK law
The Government has now written a similar measure into UK law, so this will continue to apply. The default cap has been set at £45 per monthly billing period.
Buying a package holiday from an EU company that targets Brits? You'll get the same protection
Martin Lewis says that under EU law, which still applies to the end of the year, travel firms from outside the UK that target UK consumers have to provide protection to them in the event of their company going bust.
This will continue whether or not a trade deal's agreed.
However, consumers who purchase packages from EU-based traders that are not targeting the UK for business will not get the same protection – so you may need to check.
If you take a pet to Europe in 2021, you're likely to face much more red tape
Under the EU Pet Travel Scheme, owners of dogs, cats and ferrets can travel with their animals to and from EU countries provided they hold a valid EU pet passport.
To get a passport, pets must be taken to a vet before travel, microchipped and vaccinated against rabies.
But from January 1 that'll change, deal or no deal.
Next year, the UK will become a 'third country' for the purposes of the EU Pet Travel Scheme, which means there's likely to be much more red tape to take your pet abroad – though exactly what documents and health checks are required will depend on what category of 'third country' we become, which in turn depends on the outcome of ongoing talks.
The UK Government's said there are a number of different possible scenarios – but as things stand, it says if travelling with a dog, cat or ferret on or after January 1 you should contact your vet for advice at least four months ahead.
Driving in the EU next year? You may need a permit in some countries, and a 'green card' if taking your car
At the moment, if you have a UK driving licence you can drive in the EU, Iceland, Liechtenstein, Norway and Switzerland without any extra documents.
But next year, the Government has announced there may be new requirements.
And at the moment, the plan is that from January 1:
You'll need an international driving permit (IDP) to drive in some European countries. These cost £5.50 and it's possible you may need more than one. You can see if you need an IDP here – although the information will likely be updated as more details come to light. We've asked for a full list of the countries you'll need an IDP for and will update this guide when we know more.
If you're taking your own vehicle, you'll also need a 'green card'. This is an international certificate of insurance issued by insurance providers in the UK, guaranteeing that the motorist has the necessary minimum level of third-party cover (you may need to pay if you want a higher level of cover). To get one, contact your insurer. It will send you your green card and you need to carry the physical document when you travel. You'll also need a GB sticker.
UK citizen living in the EU should exchange thier licences now.
If you're a UK licence holder living in the EU, the UK Government says you should exchange your UK driving licence for a local EU driving licence before 31 December 2020 and from January 2021, you may have to pass a driving test in the country you live in to be able to carry on driving.
This depends on local rules and the outcome of the negotiations between the UK and the country you're in.
If you return to live in the UK, you'll be able to exchange your EU licence for a UK licence without taking another test, so long as you got your initial licence from passing a test in the UK.
EU licences will continue to be exchanged even after the transition period, so there shouldn't be a rush to exchange them during the transition period in particular.
Consumer rights and financial security
Much of the UK's financial services legislation comes from EU directives.
These allow banks and other financial services firms to offer banking, saving or lending services across the EU without needing to be regulated by each individual country's financial regulator.
Some of the most important consumer rights laws in the UK – such as the Consumer Rights Act, which provides protection when you buy goods online and in store – are also based on EU directives.
Here's what Brexit means for these rules:
You'll still be protected up to £85,000 per person per financial institution with UK-regulated banks.
EU banks that operate in the UK will be able to continue to do so for at least three years
Your basic consumer rights won't change – but seeking redress from EU traders may be tougher next year
The UK will remain part of a key euro payments system
UK banks are shutting thousands of British expats' accounts due to Brexit
What is the impact on EU citizens living in the UK?
While Brexit affects everyone in the UK, the most immediate direct impact will be on the 3.8 million people living here who are citizens of other EU countries.
If you're one of them, here's what you need to know:
You'll have to apply to stay here long term
If you're a European Economic Area or Swiss citizen living in Britain, you won't have to leave the UK because we've left the EU. But – with or without a trade deal – you and your family may have to register with the EU Settlement Scheme to continue living in the UK after 30 June 2021.
Settled status will be given to successful applicants who, by the time they apply, have been living in the UK for at least five years.
Pre-settled status will be given to successful applicants who won't have lived in the UK for five years by the time they apply.
The deadline for applying is 30 June 2021.
There are extra rules if you're overseas and the family member of someone living in the UK
If you're an EU citizen who currently lives outside the UK, but you have a family member living in the UK and want to come to the UK to live, there are extra rules to consider (and these apply deal or no deal).
Please see MSE for all the details
What will the impact on UK citizens living in the EU be?
Before Brexit, all UK citizens were also EU citizens, which meant they could go live and work anywhere in the European Union – from Seville to Stockholm – without needing to apply for a visa.
If you do live abroad, here's what you now need to know:
If you're living in an EU country on 31 December, you'll be able to stay there
You and your family may need to apply for a residence status to confirm that you were already resident in the EU country you live in before December 31 2020. You will have until at least 30 June 2021 to do this.
Planning to study abroad? We still don't yet know if the Erasmus+ scheme will continue beyond this year
If you're awarded funding for the Erasmus+ scheme by December 31 2020 then you'll be able to participate fully for the duration of your exchange, even if it runs into 2021.
Beyond that though, the future of UK participation in the Erasmus+ scheme is unclear.
The Government says it remains open to taking part in some elements of the scheme next year, if it is in the UK's interests to do so, but there are no guarantees.
It says it's also looking at a wide range of alternative options for international education exchange.