Brits in EU risk losing UK bank accounts
Brits in EU risk losing UK bank accounts. Tens of thousands of British expats who live in Europe run the risk of having their UK bank accounts closed 'in weeks' due to post-Brexit rules.
Lloyds, Barclays and Coutts are among the UK banks starting to give notice to expats to warn their accounts will be closed at 11pm on December 31.
The government has not yet negotiated post-Brexit banking rules so the current regulations will not apply. Stalemate between Britain and Europe in ongoing talks over Brexit has left it a "bureaucratic nightmare" for UK banks to provide services to Brits living abroad.
Banks are making their own decisions as to which EU countries to pull out of and which to continue operating in.
Brits in EU risk losing UK bank accounts
The Treasury has however urged banks to treat customers "fairly" and said pulling accounts is a "commercial decision".
Lloyds Bank confirmed that it will be withdrawing services from Holland, Slovakia, Germany, Ireland, Italy and Portugal - in a move that will affect 13,000 British customers. The bank, which is Britain's biggest banking group, started writing to its customers living in these countries since August, telling them that their UK bank accounts would be shut on December 31st.
“If customers have regular deposits into, or payments out of, their account, they will need to make other arrangements before their account is closed," the bank said.
Barclays also confirmed bank and credit-card customers living in the EU are being warned their accounts may be closed. Customers living in Spain, France and Belgium have received notice their Barclaycards will be cancelled on November 16th
Coutts also confirmed it will be no longer serve customers based in the EU, and told Brits they will have to make "alternative arrangements"
Nationwide says 5,000 accounts belonging to overseas Britons will close, leaving them in financial limbo.
Natwest and Santander have said they currently do not have plans to shut down accounts, but are "considering their options".
Brits in EU risk losing UK bank accounts
Upon the completion of Brexit and the UK's departure from the EU, it will become illegal for UK banks to provide for British customers living the EU without applying for new banking licences.
The government has failed to negotiate post-Brexit banking rules and so pan-European banking rules, known as passporting, will no longer apply to these customers.
Rather than negotiate the specific banking rules of 27 member states, which has been described as a 'bureaucratic nightmare', some banks are closing their customer's accounts.
In a statement, the Treasury said: 'We expect banks to treat their customers fairly and provide timely communications to enable them to make appropriate decisions.'
'However, the provision of banking services is a commercial decision for firms based on a variety of factors, including the local law and regulation of specific EEA countries.'
"In some cases, continuing to serve customers would be incredibly complex, extremely expensive and very time-consuming, and simply would not make economic sense.
"This is passporting — this is the reality of Brexit.”
The above has been reported in many UK newspapers.
What should I do if my account's being closed?
British expats often choose to keep a UK account open if they receive a pension, salary or other income in pounds, as many non-UK accounts have fees or poor exchange rates for converting pounds into local currency.
If your bank's told you it's closing your account and you want to keep it, there are a few things you can try:
Check with your current bank if there's any way of appealing the closure. In most cases, this won't be possible as you'll need a UK residential address to keep the account and it's likely this will need to be your main residential address. But it may be worth checking with the bank what, if any, options you have, depending on your circumstances – for instance, if you do have a suitable UK address that meets the bank's requirements, which might be a solution.
Switch to another UK bank instead (though this comes with a risk). It's worth checking which other UK banks are still operating in the country you live in – some may let you open a new UK account without needing to go into a branch in the UK.
The big warning here is that even if you can open a new account with another UK bank, it is always possible it could later decide to close expat accounts – But if you need a UK bank account and can't keep your own, this may still be your best option.
See if you can use a local bank. An alternative may be to open an account with a bank in the country you live in, though you'll need to check if you can still receive payments you were getting into your UK account and also factor in fees. A UK state pension, for example, can be paid into an overseas bank account, but the money you get will be subject to currency conversion.