Monday, 8 September 2014

Your money and a Yes

How would Scottish independence affect savings, mortgages etc held by people in Scotland?

The worries people seem to have hinge on the big question over which notes and coins might be used.

If an independent Scotland managed to keep the pound, then it might be easier to keep things much as they are at the moment - unless a new government in Edinburgh decided it wanted to change the rules.

But if not? If Scotland had a different currency, what then?

Would homeowners be in the worrying position of paying interest and paying back their sterling loan in a different currency to their wages?
Would new borrowers, using a new Scottish currency, find they pay higher interest because Scottish interest rates are higher than in England?
In fact, could Scottish savers find that they are earning higher interest for their nest eggs?

*Bank accounts
The Scottish Government has reassured savers and current account holders that they would have the same deposit protection that they enjoy now in the event of a bank failure, up to £85,000 per bank - a guarantee which is underpinned by EU rules.
So customers would hope that the guarantee would hold even if Scotland had neither the pound nor the euro.

Future pensioners are being promised a better state pension in an independent Scotland.
As for those with additional private pension savings, built up in sterling, might they be able to hope for a more substantial pension income if the pound proved stronger than a new Scottish currency?

Would the impact of a new or different currency on insurance be less significant?
Car insurance is already cheaper in Scotland for other reasons.
Car and home policies come up for renewal every 12 months anyway, so might this be less of a worry?

*Tax free savings
The Scottish Government has said it would continue to support tax-free savings, through products like savings and investment ISAs, after a Yes vote.
If Scotland had a difference currency, would old ISAs remain in sterling? Would transfers between old and new products be possible?

Lots of questions - and, as things stand, they are hard ones to answer.

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