Millions of consumers fear cost of living surge post-Brexit

As the date of a possible withdrawal from the EU looms, more consumers than last year fear for their financial wellbeing in a post-Brexit world, with worries about a rise in the cost of food topping the list of concerns, according to new figures from YouGov, on behalf of mutual insurer Royal London.

Overall, 35 percent of consumers – around 17 million people (as calculated by Royal London using ONS figures) – think their personal finances, in general, will get worse once the UK leaves the EU in less than a month’s time, up from 32 percent three months ago (November 2018).

A rise in the cost of food, a fall in the value of the Pound and an increase in the cost of energy were the top three biggest concerns among those fearing the worst for their money, with 93 percent – approximately 16 million GB adults – expecting the cost of food to go up, the survey found.

Meanwhile, 84 percent (equal to almost 14 million GB adults) of those who expect a general decline in their financial situation believe the value of the Pound will fall and 71 percent think the cost of energy will rise after Brexit.

These were the top three concerns among both those who voted Remain and those who voted Leave and who expect their financial situation to worsen.

A further 39 percent expect their financial situation will stay the same (up from 38 percent in November 2018), 9 percent think it will get better (up from 8 percent in November) and 17 percent “don’t know” (down from 23 per cent).

Overall, 63 percent of remain voters believe that their personal finances will get worse following Brexit, compared with 11 percent of those who voted to leave.

Just 1 percent of remain voters think their finances will get better, against 17 percent of leave voters. Meanwhile, 23 percent of remain voters think their finances will stay much the same, compared with 59 percent of leave voters.

The proportion who “don’t know” was roughly even across the remain and leave camps, with 13 percent of remain voters and 12 percent of leave voters saying they aren’t sure.

Becky O’Connor, Personal finance specialist at Royal London, said “People are becoming more pessimistic about the real impact Brexit is going to have on them personally with each passing day, but they still don’t know what, if anything, to do about it.”

“But 15 percent of consumers have put off making a big financial decision – that’s millions of people not getting on with their lives – not buying homes, not going on holiday, not buying cars, as Brexit negotiations roll on.”

Among those who think their personal finances will improve, a rise in the value of the Pound (64 percent) and a fall in the cost of food (34 percent) were cited as the biggest reasons. 8 percent of those surveyed – equal to around 4 million people – said they have already made changes to their personal finances specifically because of uncertainty around Brexit, while 87 percent had not made any changes.

Of those who had made changes, 63 percent said they had reduced their spending, 46 percent had increased their savings and 27 percent had chosen not to go on holiday this year. 15 percent of the British adult population – said they had put off making a big financial decision because of Brexit, with 46 percent of these saying they had put off booking a holiday, 29 percent saying they had put off buying a house and 26 percent saying they had delayed buying or leasing a car. 9 percent said they had put off retirement, rising to 22 percent of those aged 50 to 64.

“Anyone who is worried can take some precautions with their cash, such as making sure they have a savings buffer worth three to six months of salary, exchanging currency in advance to secure a certain rate and talking through the risk level of their long-term investments and pensions with an independent financial adviser.”