Theresa May's surprise announcement that she would be calling for a snap election in June 2017 has already triggered a steep rise in the value of the pound, while the FTSE100 plummetted.
But how will your pensions, investments and holiday money be affected?
Read on to find out what the experts are saying.
Pensions and retirement
The election could bring significant change to pensions in the UK – specifically around tax relief and the State Pension.
Richard Parkin, head of pensions policy at investment company Fidelity International, said: “Rather than causing the government to postpone elements of policy making, I think [the election] may embolden them to do more.
“The big one is pension tax relief. With a big majority, Chancellor Philip Hammond could go for reducing relief especially given May's focus on ‘JAMs’ [Just About Managings] who would be likely to be untouched or even benefit.”
A strong showing in the election could also see the government ditch the controversial triple-lock, which ensures the State Pension will rise each year by the highest of inflation, earnings growth or 2.5%.
While obviously hugely popular, it’s also costly, and the government could decide it’s in a strong enough position to risk losing some voters over the issue.
As for the State Pension age, Tom Selby, senior analyst at investment firm AJ Bell, believes this is one area that we’re unlikely to see much change – in the short term at least.
“Going into an election on a manifesto promise to increase the State Pension Age would be extremely risky,” he said.
“Given the political sensitivities surrounding the decision, it would be no surprise to see the Conservatives quietly shelve any decision on this until after the vote is done and dusted.”
The FTSE endured its worst day since June 2016, falling 2.5% over the course of the day.
With such a sharp drop, many investors may be tempted to offload some of their investments and seek out safer shores.
Indeed, there has already been a sharp rise in demand for gold, often seen as a safe haven in uncertain times.
Investment firm The Pure Gold Company saw a 119% increase in customers buying physical gold yesterday after the election call.
However, investment firms have urged investors not to panic.
First, it’s interesting to note that the main culprit behind the FTSE 100’s decline was not the election, but the falling pricing of iron ore, which hammered listed mining companies.
Russ Mould, investment director at stock brokers AJ Bell, added: “While it may be tempting to head into cash or stock up on supposed haven assets such as gold, the last thing investors should be doing is making any hasty decisions just because May called a general election.
“Share prices are influenced in the short term by many factors, including politics, but in the long term the ultimate drivers of company share prices and valuations are profits and particularly cash flow.
“So, unless investors think the election result due on June 9 will lead to government policies that could directly and materially affect a company’s cash flows, then they are probably better off doing as little as possible."
Nigel Green, founder and CEO of financial consultants deVere Group, also urged the importance of maintaining a diversified portfolio in such volatile times.
“Having a well-diversified portfolio across asset classes, sectors and regions means you are best-placed to mitigate risks, especially in times of increased volatility,” he said.
“Yet it is alarming how many people's investments are not truly diversified."
In his Budget earlier this year, the chancellor announced plans for a 2% hike to National Insurance Contributions (NICs) for the self-employed.
He subsequently backtracked on those plans after huge public outcry, but he could decide to reinstate it later this year if he feels he has enough support from inside his party.
Tom Selby at AJ Bell commented: “When the government U-turned on plans to increase NICs for the self-employed, it did so purely because the decision broke a manifesto pledge.
“Chancellor Philip Hammond argued the policy remained fair given the increased entitlements these workers now receive under the single-tier state pension, so logic dictates this policy should form party of the Conservatives' 2017 manifesto."
Sterling was the big winner of the election announcement, jumping to its highest level against the dollar and euro since December.
Does this mean the pound will keep rising, or is this a temporary blip?
While the early indications are the pound could strengthen further – Deutsche Bank, which has in the past been staunchly bearish on sterling, described the election as a “game changer” for the pound and would be raising its forecasts – the truth it’s extremely difficult to know what lies ahead.
If you do want to buy currency for your next holiday, you might want to consider hedging your bets.
Buy some now to take advantage of the recent spike, and the rest closer to your actual holiday. While it means you won’t get the best rate, it also means you won’t be left massively out of pocket.