It’s not certain what would happen to the economy if the UK chose remain in the EU, and it’s not certain what would happen if it chose to leave.
This guide raises some questions about how changes in the economy could affect you. It’s a good starting-point for exploring the most relevant pieces of our economy coverage.
Would I be better off?
This doesn’t just depend what happens to the economy as a whole - it also depends on what your job is, where you live, and how the government chooses to respond to the economic effects of leaving or remaining in the EU.
Sometimes, big figures are divided up to give the cost ‘per household’ of choosing to leave or remain. But dividing a big figure between everyone isn’t the same as knowing what the impact would be on particular families or businesses in particular places.
A different approach is to estimate how prices for different things would be affected, and then compare this to spending patterns across different income brackets and household types. Using this approach, the Centre for Economic Performance have suggested that the costs of leaving the EU would be distributed fairly equally across different types of household.
But there’s a trade-off: the more specific you want to make a prediction, the more assumptions you have to make about who you are talking about and what future decisions will be made by businesses and politicians.
This is especially true if you want to predict the effect on welfare benefits. One report offers 32 possibilities for the precise reduction in tax credits and benefits to low income households, depending on the makeup of the household and how the government chose to achieve its goal of eliminating the deficit.
What would it mean for my job?
A vote to leave would affect different people’s jobs differently.
In the near future, most economists expect that a leave vote would mean jobs would be created more slowly - and some jobs would be lost. It might be harder to find a job, or there might be less opportunity to change jobs. This is because the uncertainty surrounding change would slow down business investment and consumer spending, so firms would hire fewer workers (this may be happening already).
Beyond that, it depends what kind of business you work for. Businesses that export to the EU will be affected most quickly if there are doubts about how easy it will be for us to continue to export. But the vast majority of jobs are not directly connected to exports to the EU, and whether exporting businesses ended up doing better or worse would depend on future trade deals with the EU and other countries.
In the far future, it’s far from certain what kinds of jobs would gain or lose from leaving the EU. It depends if you face competition from foreign workers for your job, or if the business you work for faces competition from abroad. Even if some businesses do lose out from a changed economic environment, the same changes may create new opportunities for other companies—or new companies. It also depends on what kind of immigration policies or trade agreements were enacted by future governments. Voting to leave or remain would create different sets of opportunities for the government, but not a set future pathway.
The government might have more flexibility to set restrictive policies on immigration from the EU. Again, this would depend on the kind of new trade deal we struck with the EU, and the government might not choose to restrict immigration anyway. If it did choose to restrict immigration, it is not certain that it would be able to meet its target.
If you work in the public sector, as 17% of people in work do, what matters is how much money the government has to pay for public services. Some estimates suggest that a vote to leave could mean further cuts in spending. This is likely to mean fewer public sector jobs.
EU legislation also covers many important workers rights, although it is easy to overstate the likelihood that these would disappear if the UK left the EU. It would depend on political decisions in the future.
Would my wages rise or fall?
It’s not a settled debate. Some issues debated in the referendum campaigns have included immigration, labour rights and the effect on worker’s wages.
Most research suggests that immigration has a small effect on wages, generally benefitting medium and higher-waged workers and reducing pay for lower-waged workers.
Recent research by the Bank of England suggested that immigration had a small but discernible effect on lower paid workers. For lower-paid occupations, a 10% rise in the ratio of immigrant workers to UK born workers was associated with a near 2% reduction in pay. Immigration had no significant effect on average wages overall.
If you believe that economic growth would be slower overall, then this implies that workers’ wages will be able to buy less. The TUC has used a range of economic forecasts that claim that the real value of average wages in 2030 (what wages can actually buy you) will be £38 per week lower if the UK chooses to leave than if it chose to remain.
As has already been said, this kind of claim should be treated with all the cautions that come with using economic forecasts and focusing on averages. They may not be right, and they may not reflect what you experience.
Would prices go up?
For example, the price of food could go either way if the UK left the EU. The price of food from outside the EU might go down if EU tariffs were removed. At the same time, new tariffs might make food from inside the EU more expensive. Food from inside the UK might be more costly to produce, unless the government replaced EU subsidies for farmers. Wages, taxes, wholesale energy costs, the level of competition, rental rates and other things affect prices too.
The effect of EU regulation on prices is a point of debate. EU regulation can make the prices of some services cheaper, such as caps on mobile phone roaming charges. Other people argue that EU labour regulations raise business costs and therefore keep prices unnecessarily high.
None of these debates are cut-and-dried. It’s unclear how important the EU is for innovations like lower roaming charges, and it seems likely that the UK would maintain many workers entitlements outside the EU—especially since in some areas it provides more than the minimum.
The effect of leaving on shop prices, airline flights and energy bills would similarly be complicated.
What would happen to my tax bill?
Leaving the EU would make it harder for the government to achieve a balanced budget, according to most economists. How this affects your tax bill would depend on political decisions after the referendum.
Leaving the EU wouldn’t make it much easier for the government to reduce the nation’s total tax bill, should it want to, because savings on the membership fee would be outweighed by the costs of lower growth.
If the UK didn't contribute to the EU budget the government and just spent the same amount in the UK as the EU does now, it would save £8.5bn a year on EU membership. The figure equals between one and two pence in every pound of the £665bn collected in taxes in the UK each year.
But if the economy grew more slowly, as most (but not all) of the economic forecasts predict, then less tax revenue would be collected and the government would have to spend more.
Weighing these effects against each other, the IFS have predicted that either additional cuts or extra years of austerity would be needed if the government wanted to meet its current target of a budget surplus.
The key word here is ‘if’. Most economists do think that leaving the EU would increase the strain on UK public finances overall, but how this affected your tax bill would be the result of political decisions made after the referendum about government spending, borrowing and taxation.
Leaving the EU would give the UK more flexibility in how taxes are set though, especially on the application of VAT.
It could also mean the reintroduction of duty free purchases if you travel between the UK and EU countries, though probably tighter restrictions on what you can bring in. This would depend on what kind of trade relationship the UK established with the EU after leaving.
Would it be easier to buy a house or rent?
Almost all commentators believe that average house prices would fall in the event of a vote to leave. It’s more difficult to put a number on how far they would fall.
It’s also difficult to say who would gain or lose from this. The Treasury have predicted that average house prices would be between 10 and 18% lower after two years than they would otherwise have been. But if interest rates went up at the same time, the cost of servicing a mortgage would rise. Buying or owning a house could become more or less costly depending on how these two effects play out. For private renters, lower house prices might mean cheaper rents—but higher mortgage rates would make rents more expensive
Looking at averages might not be the best way to approach this question. Housing markets are regional and localised. It seems likely that prices in some areas might be more resilient, such as London, and a fall in the exchange rate might make high-end property more desirable to wealthy foreign buyers.
In the long term, demand for housing would also be affected by immigration policies which followed a vote to leave. But future immigration levels are also difficult to predict.
Would it become easier or harder to pay for the NHS?
The UK government would save £8bn on the EU membership fee, which it could spend on public services like schools or the NHS if it chose to.
However, the most economists predict that leaving the EU would make it harder to pay for public services. The effect of lower economic growth would probably outweigh savings on the EU membership fee. The IFS has emphasised that leaving the EU would be bad for public finances overall.
Even if public finances came under more strain, it’s difficult to say what the effect on the NHS would be.
In part, it would depend on future decisions about NHS funding. The Coalition government committed to increase spending on the NHS in the aftermath of the 2008/09 recession. So lower economic growth might not result in reductions to the NHS budget.
It might also depend on future decisions about immigration policy. Changes in immigration policy could possibly affect NHS staffing, since about 5% of NHS staff hold EU nationality. Since EU immigrants both contribute to UK public services by paying taxes and add to the cost by using them, it’s difficult to say whether EU immigration is a financial cost or benefit to UK public services overall. And there would be additional demand if UK nationals living abroad chose to return to the UK.
Finally, trade deals currently being negotiated by the EU such as TTIP could also have an impact on the way public services like the NHS were funded in future. Leaving the EU doesn’t necessarily mean that the UK would be unaffected by TTIP and the UK could choose to negotiate a TTIP-like deal with US in replacement.
Would I be able to go and work, study or retire in other EU countries?
There were an estimated 1.2 million UK-born people living in other EU countries in 2015. Just as with UK policy on immigration from the EU, the ability of UK nationals to work, travel, claim benefits and access health services in other EU countries would be up for negotiation.