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What Brexit means for your pensions, mortgages and money

Economy:
What Brexit means for your pensions, mortgages and money

BRITAIN'S historic vote to leave the European Union is set to have a big impact on household's everyday finances.

Global markets have been tipped into turmoil by the referendum outcome and this has a knock-on affect on family finances from mortgages to pensions.

Here's what you need to know.

Mortgages

Homeowners have been urged to fix mortgage rates where possible.

It's thought the Bank of England may cut interest rates in coming weeks in an effort to boost markets.

But banks could start to raise morgage costs amid a short-term drop in appetite for lending, said experts.

A long term raise if inflation, as a result of the weaker pound could also force the Bank of England to raise interest rates.

Gra? Inne Gilmore from estate agent Knight Frank, said: "There is a chance that mortgage rates become detached from the base rate.

" While the base rate may well be cut in the coming weeks, lenders may raise their rates as a technique to control their lending levels.

"In the longer term, any increase in inflation could trigger base rate rises, which would again translate into higher mortgagerates.

" This scenario would be more challenging for those on variable rate deals. "

At the moment , homeowners can fix deals at record low levels .

Pensions

Stock markets are expected to stay a in a state of turmoil in coming days and weeks amid the uncertainty caused by the vote to leave, this erodes the values ​​of pensions savings, which are invested.

But savers who are not intending on taking their pension any time soon have been urged to keep their cool and not make any hasty decisions.

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Markets are likely to recover in the longer term as the result is digested.

However, savers approaching retirement and thinking about buying an annuity - a retirement product that provides a guaranteed payout for life have been urged to move sooner rather than later.

Yields on government bonds (gilts) have fallen over the past couple of days, which is likely to lead to lower annuity and payout rates.

Petrol prices

Drivers could see a short-term rise in the cost of petrol, according to some motoring organisations.

RAC Fuel Watch spokesman Pete Williams said: "It is too early to tell what the implications are in the mid to long term but it is likely motorists will see some volatility in the price of fuel on UK forecourts in the coming weeks.

"While the cost of crude has dropped as markets react to fears of a global economic slowdown the fall in the value of the pound to levels not seen since 1985 means that retailers are facing an increase in the wholesale price of around 1.5 pence which will very be likely passed on to motorists at the pump. "

Savings

Interest rates on savings are already at dismal lows, but could fall further if the Bank of England cuts core interest rates.

However, savers can still get good rates by switching current accounts to reap higher interest rates of up to five per cent on offer.

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26 June 2016, 19:53