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How can you make the most of your money in a volatile market?

By HiFX   /     Sep 08, 2016  /     Money Matters  /     , , , , , ,

Following the result of the EU Referendum, it is unclear what will happen next to the Pound. The initial shock of the Brexit vote caused it to lose value significantly at first, but then its value seemed to start stabilising. It regained some of its losses following more positive than expected economic figures, but questions still remain about what will happen in the long term.

The good news is that there are options available to you that could help you to get more for your money or give you peace of mind, whatever happens next. We’ve put together some scenarios to illustrate what kind of opportunities might be available to you. These are based on examples from recent customers so we hope they’ll be a useful guide for you, but please do bear in mind that everyone’s situation is different and you should carefully consider what is right for you before making any decisions.

Case 1: Regular Payment Roger

Roger has been living in Spain for a few years now following his retirement. Until recently, he had been transferring his pension to Spain from the UK in small lump sums whenever he happened to notice a rise in the Pound’s value. But since the vote to leave the EU was announced, he has been worrying about how far the Pound could fall.

At first, he started wondering if he should stop all payments and live off his small Spanish savings account for now. But as the dust settled, Roger has decided that it looked like nothing is going to change significantly for now, as the process of leaving the EU is likely to take several years.

Characters-RogerRoger wants to stay in Spain for now while he waits to see what the longer term implications of Brexit will be. In the meantime, he wants to secure a stable flow of money so he can stop worrying about what will happen next. He has now signed up for a regular payment agreement to transfer £800 every month for the next year. His rate is secured so he knows how much he will receive each month and the payments will be handled automatically by direct debit. This agreement gives him peace of mind and makes it simpler for him to manage his budget. So now he can relax and enjoy the Spanish sunshine.

Case 2: Rate Alert Ricardo

Ricardo is from Portugal, but took a job in London about a year ago. He likes to send some money home fairly regularly to help out his family and to maintain his property, but he doesn’t have a set deadline. After the vote to leave, he was uncertain what to do next because he has never experienced the Pound being so weak before, but he does need to make a payment at some point in the next couple of months.

Characters-RicardoHis work in the City means that Ricardo tends to follow the financial markets fairly closely and his flexible budget means that he’s comfortable taking on a bit of risk. He’s decided to set up a few rate alerts, so that he is informed straight away if the Pound makes a small recovery, meaning he can take advantage of it. But he knows that he does need to send the money across at some point, so he has also set up an alert that is within a couple of cents of the current market rate as a back-up plan.

 

Case 3: Forward Contract Frieda

Frieda recently moved to the UK from Germany to pursue a new opportunity within her company. She is currently renting but is in the process of selling her German house and hopes to buy a UK property in the coming months. She wants to take advantage of the weaker Pound, which will give her a larger budget, but she was finding it hard to know how much she could spend when the exchange rates were constantly moving.

Characters-FriedaSo Frieda has decided to use her Euro savings to take out a forward contract, which allows her to secure the current exchange rate for up to two years with a small up-front deposit. She knows there is a chance that the Pound’s value could drop further, but she feels that it is more important to have the security that a forward contract offers her. She now knows exactly how much she can spend and start making offers on properties.

The forward contract also demonstrates her commitment to UK estate agents as she can show that she has already agreed to convert the Euros.

What about you?

We hope that this has helped you to think about some of the potential options available to you when you are deciding what to do with your money in the coming weeks and months. If you’d like to discuss your situation in more detail with one of our friendly experts, please contact us.

 

The details expressed in this transmission and accompanying documents are for information purposes only and are not intended as a solicitation for funds or a recommendation to trade. HiFX Europe Limited accepts no liability whatsoever for any loss or damages suffered through any act or omission taken as a result of reading or interpreting any of the above information. HiFX Europe Limited is authorised by the Financial Conduct Authority under the Payment Services Regulations 2009, registration 462444, for the provision of payment services. HiFX Europe Limited is a registered MSB with HM Revenue & Customs – Reg No: 12131222. HiFX is a limited company registered in England and Wales. Registered number: 3517451. Registered office: Maxis 1, Western Road, Bracknell, Berkshire, RG12 1RT

 

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4 Comments

  1. Barrie Lawson Says: 9th September 2016 8:00 pm

    I have ninty thousand euros in Funchal Madeira that I would like to move back to UK the question is when?

    Reply this comment
    • HiFX Says: 12th September 2016 10:07 am

      Hi Barrie,

      I can see from our records that you’ve recently been in touch with us about this. We’d be happy to discuss your options in more detail with you, so please do feel free to contact us again if you would like any more information to support you in this decision.

      Kind regards,

      Claire (HiFX)

      Reply this comment
      • Robert Thomson Says: 24th August 2017 9:08 am

        Yes I have I am looking to pay off an interest only mortgage in Spain for 159000 euros. I have the cash invested in my pension pot in the UK. I have been tracking the euro in recent months to see if it will to a reasonable rate so I could pay of this whole mortgage. I have start of Feb 2018 to pay this off. I would be comfortable if the euro reached 1.15 to buy can you advise. I also have fixed rate for 500 euro per month played into my spanish account.

        Reply this comment
        • HiFX Says: 24th August 2017 3:11 pm

          Hi Robert,

          Thank you for getting in touch. We’d be happy to talk you through the options available to you – could you please contact us on 01753 859 159 or service@hifx.co.uk so we can discuss your personal situation in more detail. Alternatively I could arrange for someone in our team to contact you if you prefer?

          Kind regards,

          Claire (HiFX)

          Reply this comment

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