Brexit day: what happens after January 31?

Telegraph Reporters
Boris Johnson's deal has been backed by MPs and the UK is due to leave the EU on 31 January, but what changes can we expect post-Brexit? - Getty Images Europe

Brexit day is fast approaching, with the UK on track to officially leave the European Union (EU) in just a few weeks time. But how did we get to this stage and what is in the Brexit deal?

Here is everything you need to know about the UK's departure, including what the deal means for UK citizens and the changes to travel, investments and savings we can expect to see post-Brexit.

What is Brexit?

Brexit - a portmanteau of Britain and exit - was coined following the 2016 United Kingdom European Union membership referendum. The referendum, held on Thursday June 23, 2016, was to decide whether the UK should leave or remain in the EU. Leave won by 51.9 per cent to 48.1 per cent. More than 30 million people voted meaning the turnout was 71.8 per cent.

What date is the UK due to leave the EU?

The UK had been due to leave the EU on March 29, 2019, two years after Article 50 was invoked triggering the exit process, but the original withdrawal agreement was rejected several times by MPs. 

The EU granted an initial extension until April 12, 2019, before backing a six month extension until October 31, 2019. 

After failing to pass a revised Brexit deal into law, and with the Benn Act preventing a no-deal Brexit, Prime Minister Boris Johnson was legally required ask for another extension. EU leaders agreed to this and set a new departure date of January 31, 2020.

Following the December general election, which saw Mr Johnson and the Conservatives secure a majority of 80 seats, MPs voted in favour of the Withdrawal Agreement Bill and the UK is now expected to meet the latest Brexit deadline. 

What is in the Brexit deal?

The prime minister's Brexit deal, which is currently being examined in the House of Lords, outlines a range of issues, including travel, money, healthcare, citizens' rights, agriculture and trade. 

Most notably, the deal states that the UK will leave the EU customs union and have the freedom to develop new trade agreements with other countries around the world.

Unlike former prime minister Theresa May, Mr Johnson has replaced the Irish backstop with a new agreement for Northern Ireland that will begin when the transition period concludes in December 2020. 

Mr Johnson has also abandoned Mrs May’s idea of a close economic partnership, opting for a more distant relationship based on a Free Trade Agreement instead.

What does the Brexit deal mean for you? Read more here. 

Will Brexit affect my travel plans?

After Brexit, the UK will enter a transition period, where many agreements between Britain and Europe will remain the same. This means that all travel arrangements and holidays between January 31 and December 31, 2020, will be unaffected. 

British citizens will not need a visa to travel to EU countries, but the European Commission has said that from 2021, travellers will need to apply for an ETIAS (European Travel Information and Authorisation System) visa waiver. Similar to an American ESTA, this is expected to cost around £6 and will be valid for several years. 

Ferries, cruise ships, coaches and trains are all expected to operate as normal after Brexit, but some travellers could face delays at EU airports, should British passport holders be processed differently.   

The latest advice from the UK government states that British travellers planning to visit the EU beyond January 31 should have a passport with at least six months of validity left after the document ceases to permit unrestricted travel across the EU.

Meanwhile, ABTA has said that UK citizens, who have a full driving licence and wish to drive within the EU, will not need an additional licence. However, an international driving permit will be required in certain countries and those who wish to drive their own vehicle will need to carry a Green Card in order for UK car insurance to be applicable. 

Fortunately, the Government has suggested that it intends to keep the European Health Insurance Cards (EHIC), which provide free or reduced-cost medical treatment in EU countries, or a similar health scheme after Brexit. 

What about my savings, pension and investments?

Britons' savings are not expected to change initially after Brexit, as the transition period will protect all bank trading agreements and deals bought from EU financial firms. 

Savers may even benefit from rising interest rates and a potential short-term boost in February, when the Conservative Budget is expected to take place. You can read more about how Brexit may affect your savings here.

With Brexit day approaching, investors could also consider and take advantage of stocks, that may benefit from a strong, post-Brexit economy - find out more about those stocks here.

However, the triple lock, which ensures state pension payments increase every year in line with the highest price of inflation, average wage growth or 2.5 per cent, does not protect British retirees living abroad. In the EU, the Government will raise payouts, but this does not extend further afield and pensioners in affected countries could have their payments frozen.

As well as this, changes to the currency could affect the spending power of those living overseas but paid in sterling. If Brexit causes the pound's value to decrease, it could weaken the spending power of pensioners living in the EU, while an increase in value could strengthen it. Telegraph Money has written a guide to everything you need to know about how Brexit may affect your pension here.

On the plus side, prospects look good for a post-Brexit property market, after recent figures revealed an increase in house sale prices in December by comparison to November. Read our guide to how Brexit may affect house prices here.

Elsewhere, regulatory changes could mean that Britain stops adhering to the EU mortgage credit directive. While this scheme has enforced strong rules to protect consumers, it has been criticised for trapping homeowners with their current providers. Read our guide to how Brexit may affect mortgage rates here.

How could it affect the value of the pound and the UK economy?

Off the back of the Conservative Party's success in the general election, experts have suggested that the value of the pound will remain the same after Brexit. 

Instead, Howard Archer, of economic forecasting group EY Item Club, said that that the real event to watch would be the trade deal negotiations.