What Brexit could mean for you as an expat

With more than a million Britons living and working in Europe, and almost four million Europeans setting up home in England, Scotland, Wales and Northern Ireland, the United Kingdom's upcoming departure from the European Union understandably has expats on edge.

As an expat, whether you're a Brit abroad or you're an EU national in the UK, you'll no doubt want to know how you might be affected when the UK separates from the European Union on Friday, 29 March, 2019. Below, we've put together everything we know so far.

Living in the EU after Brexit

If you're a British expat living in Europe, the chances are that you'll still be able to do so once the UK leaves the European Union. Many Britons head off to countries like Spain and Portugal to retire, purchasing property using their retirement funds and living off of their pensions.

If you’re working in the EU, however, things could become a little more difficult. Host countries could ask you to comply to their own immigration rules and apply for permits, especially if you are setting up your own business or you’re living in a country without learning the language. 

What’s more, as a UK expat, you could lose your automatic rights to work within the European Union, and be asked to apply for a Blue Card, a work and residence permit that provides the socio-economic rights of the EU and serves as a ‘path towards permanent residence’.

However, as the Pound fluctuates and continues to perform poorly against other currencies, including the Euro, you may decide to use the opportunity to re-enter the property market in the UK. House prices are increasing at their slowest rate in years because of Brexit uncertainty.

Volatile economy and exchange rates

Perhaps the most obvious effect of Brexit on expats will be exchange rates and the economy. In the business world, the possibility of losing access to one of the world's biggest trading markets has no doubt influenced decision making, especially in terms of investments. Airbus, for example, has threatened to pull out of the UK if there’s a no-deal Brexit,as has BMW and other major employers. For expats, that makes the future uncertain.

Until concrete plans have been put into place and the UK leaves the European Union with a deal or no deal, it's hard to predict what will happen to the economy and to exchange rates. Of course, we have seen fluctuations in the pound following Brexit talks, with a softer Brexit giving the Pound a temporary lift. As businesses, analysts and consumers gain confidence in the talks, the Pound could continue to strengthen, but the opposite could also be true.

As an expat, whether living in the United Kingdom or in Europe, keeping an eye on the economy and currencies is essential, especially if you rely on an income from your native country. Be sure to make sensible decisions when making purchases or committing to financial products such as a mortgage or a loan, as the volatile economy could work against you in the coming years.

On the other hand, a strong Pound or Euro could work in your favour and allow you to get more bang for your buck when buying property or making investments, so being savvy with your spending and preparing for all Brexit eventualities makes sense.

EU citizens living in the UK

For the three million EU nationals who live and work in the United Kingdom, Brexit will no doubt have an impact on their future. The government has posted ‘Status of EU citizens in the UK’ guidance on their official website, reassuring expats that there's "no need for EU citizens, or their family members, living in the UK to do anything now" and that an "implementation period" will ensure the rights of European citizens living in the United Kingdom will not change until 1 January 2021.

After January 2021, EU citizens and their families living in the United Kingdom will have to apply for UK immigration status through the EU Settlement Scheme. This scheme won't open until the UK officially leaves the European Union; once it does, citizens will be able to apply for permanent settlement. The full details of the scheme are still being discussed in Parliament, but at present, you'll need to supply proof of identity, proof of residence, and pay a £65 fee.

The Home Office will then contact you through a new online service, letting you know that your EU Settlement Scheme application was successful. If your application was unsuccessful, you’ll be able to appeal the decision and reapply before 30 June 2021 without having to leave the UK.

Working in the UK as an expat

One of the biggest issues many European expats are facing is their right to work in the United Kingdom following Brexit. In the short term, it’s unlikely that European citizens will immediately be stripped of their rights to work in England, Scotland, Wales and Northern Ireland, but there is the possibility of having to apply for a work permit or visa following the UK’s departure.

The UK government already employs a points-based system for non-EU citizens who want to live and work in the UK, and this could be applied to European workers following Brexit.

Currently, Tier 1 visas are granted to ‘high-value migrants’, covering entrepreneurs, investors and ‘exceptional talent’, whilst Tier 2 covers skilled workers. Politico reports that the United Kingdom is to loosen its immigration rules to allow more skilled workers to enter the market - so the chances are, even if work visas were introduced for European citizens, you'll be accepted if you work in healthcare, IT, engineering or education and have a firm job offer.

Uncertain future for expat pensions

There are more than 220,000 British pensioners living in European countries such as Spain and Ireland, using their retirement funds to live a life in the sun. In fact, pensioners are the biggest group of British expats living in other European countries, and they’re likely to be the hardest hit.

Although pensioners are still expected to receive their pensions, whether they’re living in the United Kingdom or across Europe, many have questioned whether their state pension will be up-rated following the withdrawal from the European Union. Indeed, UK pensioners who are living in the European Economic Area (including Switzerland) at present have their state pensions protected, and they’re topped up according to average wages or price inflations.

Once the United Kingdom leaves, however, the government must decide whether it will continue to top up pensions according to European regulations, or if they’ll adopt a stricter approach and treat pensions like they do in non-European countries, where pensions are frozen.

Whilst some believe that the United Kingdom will be able to negotiate protections for expat pensioners and ensure their pensions are topped up in line with inflation, it should be noted that the UK has not arranged similar deals with any other non-European country since the 1980s.

Becoming an EU citizen

British expats that want protection following Brexit may consider applying for citizenship in another EU country. Indeed, thousands of Britons applied for EU citizenship in 2016, the year of the referendum, and unofficial data suggests that the number of applications is on the increase.

If you have parents or grandparents from another country, you could be eligible to apply for nationality in that country. Millions of Britons, for example, have Irish relatives; the country reported a huge increase in the number of passport applications following the Brexit result, which lead to Ireland’s foreign minister Charlie Flanagan asking Brits not to rush to apply.

For British expats who have lived in a country for more than five years and can speak the language, there's a good chance you’ll be able to apply for a passport, and the same can be said for young British workers who are living in European countries; many leaders have suggested that they will allow young expat professionals to apply for passports and citizenship.

If none of those options suits you, then you could also consider paying for citizenship in another European country - but only if you have money to splash. Indeed, a controversial scheme in both Cyprus and Malta allows for ‘citizenship by investment', where the rich can pay as little as $100,000 for citizenship and a passport, whether that's by investing in property, buying government bonds, investing in businesses or donating the cash.

Wrapping up

There’s no denying that the Brexit vote has lead to uncertainty and fear within the expat community, and only time will tell whether the UK government and the European Union will be able to agree on an exit strategy that works for all concerned. In the short-term, however, it’s important not to worry, as protections have already been put in place to allow EU expats to remain in the UK, and UK expats to remain in European countries during a ‘transition period’. 

Make sure that you follow Money Saving Expat on Twitter for all of the latest expat news and updates following the UK’s departure from the European Union.