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How Brexit Has Affected the Remittance Market

When it was reported that the United Kingdom was leaving the European Union, Brexit became a reality that was filled with uncertainty and worry. Among these worries was how the free trade agreement would play out following the UK’s exit from the European Union. There is also a possibility that the UK’s decision to exit the European Union could affect a number of pensions, causing them to drop in value.

Something else that looked to be affected by Brexit is the sending of money abroad. It may not be common knowledge to many, but the money sent home by those who have immigrated to the UK adds up to more than any official assistance being offered in many countries. It is also worth noting that the UK is one of the world’s most frequent senders of money abroad, as well as being one of the countries that frequently sends money to developing countries.

The Pitfalls of Brexit

The main implication of Brexit is that the value of the pound is decreasing, and with a 10 percent drop being estimated over the next two years, the result could be that fewer remittances are sent as a result. Of course, there will be those who may be able to make up the shortfalls initially, but with no solid plan in place as of yet, it’s hard to determine how this position will change as the UK prepares itself to exit Brexit.

There is also the chance that some immigrants could struggle with employment, purely due to the economic wheels of the UK slowing down. This could be due to a number of different factors, but evidently will affect remittances moving forward, especially if industries become stagnant.

Leaving the European Economic Area Could Raise More Issues

Being part of the EU, businesses offering financial-based services were free to passport their services to any country that fell within the EEA. This meant that the UK had the authority to offer their services to other countries within the EEA, as well as the UK. However, should the UK leave the EEA, it could also mean that financial companies are no longer able to offer their services overseas.

It should be noted that nothing is cast in stone, and it is possible that the UK could remain in the EEA. It is also possible that even if the UK did leave the EEA, then some deals with countries the UK have dealt with in the past could be forthcoming.

Don’t Despair

Although the Brexit situation is enough to make many worry, we shouldn’t become too enthralled with what might happen. When it comes to sending money abroad, we simply need to be savvy and pro-active.

For example, instead of accepting the first offer that pops up on your screen, you should look at the options available. You could find that comparing offers from a number of different providers could look to give your remittance that additional value. 

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