What does the ‘no’ vote mean for your money?

September 22, 2014

No matter how much interest you personally took in the Scottish referendum, it was certainly an historic event. And as the dust finally begins to settle after months of uncertainty, thoughts turn to what the ‘no’ vote will actually mean for residents of the UK. Undoubtedly, the impact of the ‘no’ vote will be felt less strongly than if the result had been independence for Scotland. But it won’t quite be business as usual. Holyrood will be getting more economic powers over time regardless. And some of the questions which were raised during the campaigns by both sides will now be answered.

The pound and the markets

A matter of hours after the ‘no’ vote was announced, the impact was already being felt in the markets. The pound has hit a two-year high against the euro and shares are already rallying. Recent weeks had seen a dip in the pound as its future as the currency of Scotland became unclear. And investors are notoriously wary of uncertainty. Some advisers have been recommending caution resulting in investments being moved away from the UK markets in case of a ‘yes’ vote. For those who were able to resist the urge and have kept their investment where they were, the ‘no’ vote is a good thing – they may well benefit from the ‘relief rally’ in the markets. Share prices for Scottish-based companies, particularly banks such as RBS, are on the rise as the question of where their HQ will be are answered. They’re staying put in Scotland.

But what about the longer term impacts on the markets? Will international investors have become permanently wary about investing in the UK? Will they hold back until they see exactly what the new powers for Scotland mean and whether there’s a knock-on effect on England, Wales and Northern Ireland? Time will tell.

Interest rates

A ‘no’ vote means that the overall economic position remains more stable. This could well have saved people across the UK from lower interest rates on their savings. However, as the recent political uncertainty evens out, the Bank of England is now more likely to press ahead with raising interest rates early next year.


Whilst tax rates in the rest of the UK should be unaffected, Scots can still expect significant changes in the taxes they will pay as soon as next year. A timetable has already been agreed to devolve some tax powers to the Scottish government.

In time, Holyrood is expected to have the power to alter the tax rate in Scotland by up to 10p in the pound. That could cut the basic tax rate to 10%, or increase it to 30%. And if it moves for the basic tax rate, it will also move by the same increment for the higher rates.

The main Westminster parties are not yet agreed on what extra tax-raising powers will be devolved to Scotland. Until there’s a conclusion, it will be difficult to know what the impact might be. One to watch.


This article is for general use only and is not intended to address your particular requirements. It should not be relied upon in its entirety and shall not be deemed to be or constitute advice.

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