Scottish independence: how a yes vote affects your finances

Scottish independence: how a yes vote affects your finances
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In the event of a ‘Yes’ vote:

UK savers and investors

UK savers and investors will be unaffected in the long term. In the short term there is likely to be continued stockmarket and currency volatility.

Tom McPhail at Hargreaves Lansdown says: "Individual companies may find they have challenges to overcome in the event of a ‘Yes’ vote, but the UK stockmarket itself is well diversified, particularly the FTSE 100 where around three quarters of earnings come from overseas. Investors in UK funds typically benefit from a diversified portfolio of stocks, whose fortunes depend on a broad source of revenues from various geographical regions."

Scottish residents 

 

  • Savings accounts – In the short term, savers should not be unduly concerned about their cash – the Financial Services Compensation Scheme (FSCS) has confirmed statutory protections will remain during a transition. In the longer term, should a new currency be adopted, an exchange may be needed.
  •  ISAs - The ISA savings held by 1.9 million Scottish residents should be unaffected. The UK tax advantages of ISA will remain. "There will come a point where Scottish residents will no longer be able to save into ISA, and the Scottish tax rules could be different," says Tom. "However this is unlikely to happen for some months. So Scottish residents should continue to save into ISA to build up their tax advantaged pot."
  • Pensions – Existing savings are highly unlikely to be affected in the short term. Scottish residents should continue to save into pension, particularly where their employer is also contributing. Scottish residents will, at some stage, have their own private pension system and at that point it is expected that savings in the UK pension system could be transferred to the Scottish system in a similar way to those emigrating today can transfer their pensions to overseas pension schemes.
  • State pensions – it's expected that Scottish residents will have their own tax and benefits system eventually and at retirement, will receive state pensions, part from the UK and part from Scottish systems based upon the length of service in each.  
  • Life insurance – life insurance policies should remain unaffected. If there is a change of currency this may present exchange rate complications with premium collection, however insurers could choose to continue to run these policies in sterling.
  • House prices - House prices could fall by more than £30,000 if Scotland breaks away from the UK, claims Zoopla. The property website suggested that a Yes vote in tomorrow’s referendum could cause as bad a shock to the markets as the financial crisis - while one estate agent predicted that 'every area of the market' would be damaged. Uncertainty over Scotland's economic future and the potential loss of skilled jobs as businesses relocate to England would reduce demand for housing and depress prices, the company said.

 

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