Four and a half years after the UK voted to leave the European Union, both parties have now agreed on a Brexit deal that will allow Britain to trade freely – and without tariffs – from January 1.
Boris Johnson’s last minute Christmas Eve deal contains new rules on how the UK and EU will live, work and trade together, with no taxes on imports for businesses.
But the small print is still under wraps, with the government yet to publish its 1,000 report on exactly what’s been agreed.
In an address to the nation, the Prime Minister said: “It is up to us all together, as a newly and truly independent nation, to realise the immensity of this moment and to make the most of it.”
It triggered a jump in the Pound, signalling the start of good news for holidaymakers after it crashed to historic lows in 2016 following the EU referendum.
But what does a deal mean for your money and how will it affect food prices and more? We take a look.
Travel insurance, holiday money and flight refunds
The cost of travel insurance could become more expensive for British holidaymakers from next month with European Health Insurance Cards set to lose their validity.https://www.dianomi.com/smartads.epl?id=3533
This means you may have to pay more for medical insurance on top of the coronavirus premium.
However, there could be some exceptions.
Last week, the Government said travellers visiting the EU who need ongoing, routine healthcare treatment will have it paid for up to a year after the transition period ends, even in event of a no-deal.
A deal could also mean we retain some access to free healthcare in certain countries.
When buying travel insurance for a trip after December 31, 2020, you should look out for any clauses that relate to Britain’s departure from the EU.
The Bank of England previously warned that a no-deal would have dire consequences on the Pound, but with an announcement of a deal, its value is slowly rising, so you may get more for your money when you exchange cash next year.
Elsewhere, you won’t have to pay extra for flight protection.
Under EU rules, if your flight to or from an EU country is delayed by more than three hours or cancelled, you’re entitled to £110 and £540 per person in compensation. This is providing the delay is not your fault.
These rules will continue to apply to the UK until the end of the year. But even after that, the Government has previously said flight delay compensation rules will remain the same, as these laws have been written into UK law.
Bank accounts and savings rates
UK banks have already written to thousands of British expats warning them that their accounts will close in the New Year.
Gallery: Countries where retirees get the most government cash (Lovemoney)
This is because “passporting” – which allows banks to provide services between the EU and UK – may no longer be allowed.
It means tens of thousands of expats could find themselves without a British bank account – affecting many of those who still receive pension payments in the UK.
The 1,000 word Brexit document is set to explain exactly what passporting rights have been retained.
It’s also likely to state that those living in the UK will not lose their £85,000 financial protection.
Savings rates are determined by the Bank of England’s base rate which is set based on how the economy is performing.
It’s currently at a historic low of 0.1% because of the coronavirus pandemic which means savers are earning almost nothing on their cash. If the pound drops further or the economy takes another hit, the rate could fall to to 0% or potentially enter minus territory which would be devastating for savers.
But on the plus side, low interest rates are good for borrowers as loan charges tend to go down.
It’s too early to tell exactly what impact the trade deal will have on interest rate, however it is likely to be a more positive outcome than if the UK left without one.
Mobile phone charges
The guarantee of free roaming throughout the EU, Iceland, Liechtenstein and Norway ends on 1 January 2021.
We’re yet to hear from Boris Johnson on whether free roaming has been saved, however the four main UK mobile operators – EE, O2, Three and Vodafone – have said they have no plans to reintroduce roaming fees.
You should check with your mobile provider before you travel to see if you’re likely to face extra charges.
Will supermarket and clothing prices rise?
The Government has confirmed that no tariffs or extra charges will apply on goods from the EU from January.
This means food prices should not be affected.
The PM said: “If anything, a deal will allow exporters to do even more business with our EU friends.”
Property prices
It’s too early to say how a deal will affect house prices – experts have been divided for some time now on what Brexit means for the market.
But it’s generally agreed that prices will fall in 2021 regardless of whether the UK left with a trade deal in place.
Over the summer, the housing market has experienced a mini-boom thanks to a stamp duty break, which is due to end on March 31.
The Office for Budget Responsibility (OBR) predicted last month that house prices will fall by 8.5% by the end of next year.
The coronavirus crisis is also expected to push up unemployment, which will have a negative effect on property value.
Passports
The distinctive blue passport is back, and those who are due for renewal will see their burgundy one replaced in due course.
Most people won’t have to apply for a replacement as their new one will be issued at expiry (providing you apply) – but there are a few exceptions.
From 1 January 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.
