Waiting out Brexit in Asia

As a British man living in Asia I have been wondering how Brexit will affect me if at all and how it is already affecting those living in Asia. Many people are talking and writing about Expats living in Europe as these will undoubtedly be affected the most, but it will also have effects farther afield.

If you are an Expat in one of the big Asian financial markets of Singapore of Hong Kong, maybe you would dream of returning home one day. Brexit, will I’m sure, delays these plans. The future of London as the Capital of European finance is in doubt following Brexit, therefore, unless you have a rock solid job to go back to or you are planning on retiring you would be better off seeing what happens over the next few years before deciding to get that Job in London.

If you get paid in local Asian currency, as I do you will certainly be better off if you send money back to the UK. The pound has dropped over 15% against the dollar since the Referendum in June 2016 and many analysts believe it will stay at well under 90% of its value from the day of the Referendum. That means you are getting a lot more pounds when you send your money back home, furthermore, if you returned home you would likely be paid in Pounds again which will continue to have a lower value.

Owning property back in the UK isn’t necessarily a bad thing. Analysts predicted house prices would fall following a Brexit vote but this largely hasn’t happened. Property is still very much an investment in the UK so keeping hold of an asset makes good financial sense. Of course, if you are paying a mortgage on it and having to send money back from an Asian country then your monthly payments have reduced in real terms following the fall in the pound, so you win both ways. If you rent it out and move the money to Asia then you are losing out having to buy your Asian currency at the new higher post referendum rate.

It might be a while before your family can come to Asia for that trip they have been promising. The fall in the pound has meant spending money will not go as far as it did. Furthermore, with prices of food and drink increasing in Asia tourists will have to deal with a double whammy. The tourism sector as a whole will suffer while the pound remains weak so there is a possibility of picking up cheap flight deals as airlines cut prices to compete following a fall in demand from the UK.

Probably the most severely affected will be the retirees in Asia. Their pensions have and will continue to fall in value. The years they have spent building it up in the UK hoping to retire in a tropical climate had not taken into account the devastating impact that Brexit has had on the pound. It may mean that some will have to look for other sources of income or return home to family. I was speaking with one retired Expat who told me he was suffering from a huge fall in his pension coupled with other investments he has in the UK falling in value, he told me his income has reduced around 20% since the referendum.

Overall, I think Expats in Asia are in quite a good position. They can sit back and watch from afar at how the negotiations will go and what it will mean for the UK before deciding if they want to go back. For now, the best thing is to stay put and see what happens. 



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