United Kingdom

Will Brexit close your bank account? Britons abroad left in the dark

Thousands of Britons living abroad may still not have been told that their bank accounts will be shut before the end of the year.

When the UK leaves the European Union after December 31, some British banks will no longer be able to offer accounts and credit cards to the more than one million expats living on the Continent.

Currently, UK banks are allowed to provide services to customers in other European Economic Area (EEA) countries, but these 'passporting' rules will end with Brexit unless a new agreement is reached with the EU.

When the UK leaves the EU after December 31, some British banks will no longer be able to offer accounts and credit cards to the more than one million expats living on the Continent

Thousands of expats have already been told their accounts will shut, but with time running out, many banks still have not made a decision. So for now, Money Mail tells you all you need to know...

Why haven't I heard from my bank? 

Expats whose bank accounts will be closed should have been told by now — or at least by the end of the month. 

The Financial Conduct Authority (FCA) last week warned banks they should be giving customers enough notice if their account is to shut because of Brexit.

The Lloyds Banking Group, which also covers Halifax and Bank of Scotland, sent letters to 13,000 customers in August to inform them. Barclaycard and Coutts have also told customers that they have to move their money.

Parliament's Treasury Committee chairman Mel Stride last week called on banks to give expats 'fair warning' if their accounts are to shut. 

But in a letter to the committee last week, FCA chief executive Nikhil Rathi warned: 'Not all firms are informing customers their current accounts will be closed.'

Under the Payment Service Regulations 2017, banks must give a minimum two months' notice when closing current accounts. So if yours has to shut, you should hear by the end of the month.

Will my account have to close?

It is still not clear if any more banks will have to close accounts to customers living in Europe.

Whether your account will be affected depends on the country you live in, its laws and if you have a personal or business account.

Yet it might be that you will simply need a UK address to have an account with a British-based bank.

Lloyds customers written to so far include current and savings account customers in the Netherlands and Slovakia, and business customers in the Netherlands, Germany, Ireland, Italy and Portugal.

Barclaycard is closing the credit card accounts of customers who live in the EEA and don't have a UK address. 

Other big banks — including Barclays, NatWest, TSB, Nationwide and Co-op — have not yet ruled out closing accounts.

Spanish bank Santander says it has no plans to close any accounts. Customers can still open its EU Basic account, but this is about to be closed to new applicants.

International bank HSBC says it should be able to keep serving Britons living in the EU

Which UK banks can I still use? 

Many are currently not closing accounts and are therefore still open for business. You should try to switch to another UK bank that also operates in the country you live in. 

But there is still the possibility that a bank that accepts expat customers one day might have to change its policy the next. International bank HSBC says it should be able to keep serving Britons living in the EU.

Can I avoid fees to move money?

If you face losing access to a British bank account you might need to move money abroad or find an account that allows you to do so inexpensively.

Borderless providers such as Transferwise, Revolut and Monzo allow users to move money between countries at a low cost. 

But while some of these accounts will be useful for moving money, they do not have all the current account features, such as overdrafts.

Revolut allows customers to hold balances in 30 different currencies and currency exchange rates are shown in real time. The bank says many transfers are free, and some are subject to a 'competitive' charge.

The Post Office also offers an International Money Transfer service that allows customers to move money from a UK bank free of charge, with a fee collected only through the exchange rate.

What about my pension? 

The Department for Work and Pensions (DWP) can pay the State pension in to any bank account. You just call the DWP and arrange it.

For private pensions, Tom Selby, senior analyst at investment firm AJ Bell, says expats will need to speak to their provider to see if they can pay your pension into a foreign account. 

But he warns that this could mean your income is now subject to currency conversion risk, and adds: 'The money you receive could fluctuate depending on movements between the pound and the euro.'

Expense is the only certainty?

Becky O'Connor, head of pensions and savings at Interactive Investor, says: 'Whatever they choose to do, banking looks set to become more expensive for expats and will cause them some hassle.'

Adrian Furnival, a retired Army major living in France, says his wife Sheila's credit card account with Barclaycard will be closed, but he has heard nothing from Lloyds about his two credit cards or from HSBC about his current account.

He says: 'We need a UK bank account as two small pensions are paid there. It's all very uncertain.'

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