By Michael Doherty, Woodbrook Group CEO
LACK of clarity about the terms of Brexit is causing huge concern to British industry, commerce and to the 1.3 million citizens of the United Kingdom living in Cyprus and throughout the Europe Union. Their chief fear is that the UK will depart without a deal of any sort.
Early in the process, Prime Minister Theresa May declared that ‘no deal is better than a bad deal’. That slogan was all very well when it seemed certain there would be a deal of some sort but, as the exit date draws nearer, uncertainty is creating real distress.
These fears were exacerbated last week as May as EU leaders took it in turns to rubbish May’s Chequers plan at the summit in Salzburg, further undermining her authority and increasing the likelihood of a hard or ‘no deal’ Brexit.
Industry faces the biggest challenge but the difficulties for ex-pats are also daunting. UK consumers could face slower and more costly credit card payments when they buy EU products. British citizens living abroad could lose access to payments from their bank accounts, and have difficulty receiving pension payments. Health care arrangements could be threatened.
Ardent Brexiteers dismiss these warnings as scaremongering. But, while everyone hopes the worst will not happen, it makes good sense to prepare for it nonetheless.
In March it was agreed that a 21-month transition period would postpone the full effects of Brexit until the end of 2020. The working assumption is that even if nothing else is agreed, this transition period will still apply.
During this phase, EU citizenship and associated rights will continue for Britons, allowing businesses and citizens more time to prepare for changes that will eventually come. For expatriates, this extends the deadline for securing residency and locking in existing EU benefits to 31 December 2020.
But, be warned. If the two sides cannot agree the final terms of a withdrawal treaty, it is possible that the original Brexit cut-off date of 29 March 2019 will apply.
Either way, once Brexit takes full effect, automatic freedom of movement for Britons will end and a new application process will apply for living or working within the EU. British citizens living in an EU country, but not yet registered with the local authorities, should do so urgently to help demonstrate that they are legally resident and therefore eligible to benefit from the citizens’ rights agreement. If possible, they should take other steps to help prove settled status, such as registering for the electoral roll or joining the local healthcare system.
The citizens’ rights agreement of 2017 commits Britain and the EU to maintaining existing residency rights for UK and EU nationals ‘lawfully residing’ within either area. So a British citizen legally settled in an EU member state before withdrawal would keep the right to stay there for as long as they remain resident in that country.
For pensioners, uncertainty over Brexit is the cause of sleepless nights. Their plans for a carefree retirement have been rocked and many fear that any changes to current health care arrangements could be a disaster.
More than half a million British pensioners are living in other EU countries but the idea that only elderly Britons live abroad is simply not true. For every British pensioner living in an EU country there are two Britons of working age.
They will be fervently hoping for a deal between Britain and the EU but they should also be making plans for how to live without one.
The uncertainty about how and when Britain will take its leave has raised immediate concerns, such as how to deal with exchange rate fluctuations.
A forward contract option from a currency brokerage will allow you to lock in a current rate for up to 12 months.
If you plan to send money in stages, such as a pension fund or student allowances, a regular payment plan will allow you to send funds throughout the month at an agreed rate, which in most cases would be better than offered by a High Street bank.
*Michael Doherty is CEO of Woodbrook Group. If you require any further information, or would like to speak to Michael directly, please contact Shane Doran on +353 87 356 1722