EU red tape forces expats to close bank and premium bond accounts
Thousands of British expats could be stripped of their UK bank accounts by the end of the year, which could also mean they are locked out of premium bond prices.
Big banks, including Barclays, have written to UK customers living abroad warning them that their accounts will be automatically closed.
Expats are also at risk of losing their Premium Bond accounts, which they have held in many cases for decades.
National Savings & Investments has written to warn savers that they will be forced to withdraw their money unless they have an account at a UK bank or building society in their name.
Since Brexit, the “passport” rules that allowed financial institutions to provide services across the EU have come to an end.
Many expats could find themselves without the bank account they have used for decades. This could affect income from pensions and rental properties, but also prevent them from making vital payments and direct debits.
Jason Porter, of expatriate specialist financial adviser Blevins Franks, said banks had continued to send letters more than two years after Britain left the EU.
“It’s too early to breathe a sigh of relief if your UK financial institution hasn’t contacted you yet,” he said.
A Telegraph Money reader living in Spain received a letter from Barclays, warning him that his account would be closed on or after December 2, 2022, barring exceptions.
The notice said customers could only keep their savings or current account open if they lived in the UK and all registered addresses were in the country.
It read: “We are applying limitations to the banking services we provide to customers with an address in the European Economic Area. We are sorry to say that this means we need you to close your account.”
But it will put their premium bonds at risk, Porter added.
“Given that many UK expats had no choice but to close their UK bank accounts after Brexit, NS&I is now writing to them to advise that this will affect their ability to continue to hold their accounts,” did he declare.
Regulators in a number of European countries have said it would be illegal for UK banks to operate after the end of Britain’s transition agreement with the EU.
Banks will only be able to continue to serve their customers if they obtain new legal authorizations and create separate entities in each jurisdiction. For many, the added costs and hassle are unsustainable, so they will cut services instead.
Barclays confirmed customers with mortgages and other loans were not affected.
A spokesperson said: “We will no longer offer services to personal current or savings accounts customers (excluding Isas) within the European Economic Area.
“We are contacting affected customers to inform them in advance of this decision and advise them of the next steps to take.”