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I am EU citizen living in U.K. and with some savings into a U.K. bank account.

  • I am planning to leave UK in about 2 years time,
  • I don't need the savings right now,
  • the savings give me on average a 3% annual net interest.

The GBP currency is falling a lot because of the instability due to Brexit.

What should I do with my savings in order to avoid to lose a lot when moving country?

The country where I am planning to move is within the EU (so Euros, SEK, CHF, etc..).

Thank you

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    2 years is i long time with regards to speculating in FX - anything can happen over the next couple of years to either strengthen or weaken your current position. No one can tell you if your savings will be more or less worth in 2 years compared to the currency you a moving to. If you want to make sure your savings doesn't increase or decrease obviously you can hedge it by exchaning to what ever currency you expect to be using in the future. – ssn Aug 28 '17 at 13:08
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In general, to someone in a similar circumstance I might suggest that the lowest-risk option is to immediately convert your excess currency into the currency you will be spending. Note that 'risk' here refers only to the variance in possible outcomes. By converting to EUR now (assuming you are moving to an EU country using the EUR), you eliminate the chance that the GBP will weaken. But you also eliminate the chance that the GBP will strengthen. Thus, you have reduced the variance in possible outcomes so that you have a 'known' amount of EUR.

To put money in a different currency than what you will be using is a form of investing, and it is one that can be considered high risk. Invest in a UK company while you plan on staying in the UK, and you take on the risk of stock ownership only. But invest in a German company while you plan on staying in the UK, you take on the risk of stock ownership + the risk of currency volatility. If you are prepared for this type of risk and understand it, you may want to take on this type of risk - but you really must understand what you're getting into before you do this. For most people, I think it's fair to say that fx investing is more accurately called gambling [See more comments on the risk of fx trading here: https://money.stackexchange.com/a/76482/44232].

However, this risk reduction only truly applies if you are certain that you will be moving to an EUR country. If you invest in EUR but then move to the US, you have not 'solved' your currency volatility problem, you have simply replaced your GBP risk with EUR risk. If you had your plane ticket in hand and nothing could stop you, then you know what your currency needs will be in 2 years. But if you have any doubt, then exchanging currency now may not be reducing your risk at all. What if you exchange for EUR today, and in a year you decide (for all the various reasons that circumstances in life may change) that you will stay in the UK after all. And during that time, what if the GBP strengthened again? You will have taken on risk unnecessarily.

So, if you lack full confidence in your move, you may want to avoid fully trading your GBP today. Perhaps you could put away some amount every month into EUR (if you plan on moving to an EUR country), and leave some/most in GBP. This would not fully eliminate your currency risk if you move, but it would also not fully expose yourself to risk if you end up not moving. Just remember that doing this is not a guarantee that the EUR will strengthen and the GBP will weaken.

  • Moving 1 part per month (or every three months) is a good idea, but make sure you use a 'cheap' transfer service (e.g. Transferwise) otherwise fees will eat a lot away. – Mark Perryman Aug 29 '17 at 9:27
  • @MarkPerryman Moving money within the EU is generally not more expensive than moving money within the country you're in, if you have a bank account to send it to. There are some special cases where additional fees may apply, but broadly speaking, intra-EU bank transfers are required by EU regulations to be no more expensive than bank transfers within the country. – a CVn Aug 29 '17 at 9:36
  • @MichaelKjörling That may well be true for most EU countries, but a standard UK bank transfer to a Euro account will have a significant fee. £9 (nationwide.co.uk/support/payments-and-transfers/…), £5 (barclays.co.uk/ways-to-bank/international-payments), £15 (santander.co.uk/uk/international-payments), £9.50 (lloydsbank.com/online-banking/benefits-online-banking/…). Maybe it is a Eurozone rule? – Mark Perryman Aug 29 '17 at 9:45
  • @MarkPerryman i can send money around various countries of the euro zone(all denominated in EUR mind you) for a flat fee of no more than 4EUR if that, so what you noted should be GBP > EUR bank account transfer specific. Purely speaking from personal experience that is of course. – Leon Aug 29 '17 at 10:05
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    @Leon. Yes indeed this is GBP->EUR specific. Though some (not all) UK banks will also charge for receiving EUR->GBP. [Worth noting that within the UK, sending money is almost always completely free.] – Mark Perryman Aug 29 '17 at 10:10
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Key point here is to remember that GBP isnt falling a lot, it has fallen a lot already.

If you havent liquidated your position in pounds by now at a higher rate I would personally not bother switching to another currency right now.

The pound is near its 10 year low(nearing 2008 capital 'C' Crisis levels) and despite what fear mongers may short the market for, the sun will shine after Brexit as well. Britain has a solid economy and that hasnt fundamentally changed, so even if the pound hasnt seen the absolute periodic lowest point yet(which may still come as brexit talks become more prevalent/near their end), it will eventually pull back up.

In essence, you have more to lose acting in panic now than waiting to exchange for a better than today's rate at some point until the eventual Brexit(probably in March 2019) or at any point afterwards(if you wont be needing those savings when you move).

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    Consider also that if that 3% is interest (as opposed to average return on an investment), that feels like a pretty good rate (especially if it's not fixed-term). If you moved the money to EUR/CHF/SEK etc., would you get a similar rate? (A very quick skim shows 1.75% for 1-year fixed-term). – TripeHound Aug 29 '17 at 8:17
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    @2801001 In SEK, with banks in Sweden, you can get about 1.15%/year today if you want immediate access to money and deposit insurance. If you're willing to lock it away for two years, you can get 1.65%/year with deposit insurance. If you're willing to forego deposit insurance (I really really really do not recommend this), you can get 6.60%/year if you want immediate access or lock in 9.25%/year for two years, but only up to a maximum of SEK 50K per financial institution and of course, if the financial instution gets into trouble you can lose everything. – a CVn Aug 29 '17 at 9:42

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