Will my savings and investments be safe after Brexit?
With Prime Minister Theresa May fighting to keep her job amid the uncertainty of the UK’s final post Brexit position in March next year and the turmoil we saw in UK stock markets last week, it is understandable that investors may be starting to question ‘just how safe will my investments be after next year?’, ‘what happens to my investments if a deal isn’t reached?
Although trade and immigration have been grabbing the headlines throughout the Brexit negotiations, trade and industry bodies have been hard at work behind the scenes to try to ensure that there is minimal disruption to investors. So, what do we know?
The Financial Conduct Authority (FCA) which regulates financial advice in the UK is planning for a range of outcomes, including a no-deal scenario.
At present they are working on an implementation plan with the EU which would see existing EU law, which underpins UK Financial Services regulation, remain in place until December 2020.
This will minimise disruption to business and investors alike and provide Government with the time necessary, post the planned withdrawal from the EU in March 2019, to enact secondary legislation in Parliament to replace existing EU law with UK law.
If the implementation plan goes ahead the financial services protections and rights you currently enjoy will not change; this includes the protection provided by the Financial Services Compensation Scheme (FSCS) for your savings accounts, investments and your pension plans.
As one would expect from an institution set up to protect the rights of an investor, the FCA does have contingency plans in place in the event that the implementation period is not agreed.
This includes the continuation of financial protections for UK residents investing with licenced providers operating within the UK and a proposal for a continuity of cover for those holding investments with an offshore provider for an interim period.
However, EU providers operating within the UK and providing protection under their own national investor compensation schemes will need to apply for full permissions to operate in the UK after December 2020 and this is likely to include a requirement for provision of investor protection under the UK’s compensation body, the FSCS.
Whilst negotiations surrounding the legislative framework of your investments is ongoing, it is comforting to note that tax legislation will not be directly affected as Income Tax, Capital Gains Tax and Inheritance Tax are all controlled domestically.
You can access more information on the FCA negotiations at:
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