Expats in EU face losing UK bank accounts

Tens of thousands of British expats living in Europe face losing their banking facilities with UK providers because of the failure of the UK and EU to reach a post-Brexit deal over financial services.

David Sapsted

21 September 2020

Lloyds Bank - the UK's largest banking group - confirmed to the Sunday Times that it would be withdrawing services from 13,000 British customers in Holland, Slovakia, Germany, Ireland, Italy and Portugal, with their UK bank accounts closing on December 31, the end of the Brexit transition period.Meanwhile, Barclays has told British credit card customers living in the EU that they will not be able to use their Barclaycards from this autumn unless they are able to provide a residential billing address in the UK.And Coutts Bank, a NatWest subsidiary, has written to British expatriate clients telling them: “We’ve taken the difficult decision to withdraw offering services to clients who reside in the EEA (European Economic Area) unless an alternative to the passporting regime is swiftly agreed at a government level.”The ending of the 'passporting' regime at the end of the year will mean UK banks will be unable to offer services to EU customers unless a deal on financial services can be reached between London and Brussels.The British Bankers' Association (BBA) said passporting was the foundation of the EU single market for financial services and that, without a post-Brexit deal, UK banks would face significant regulatory barriers to providing cross-border banking and investment services to EU-based clients.Jason Porter, a director at specialist expat advisory firm Blevins Franks, told International Adviser on Monday: “There are also examples of UK investment managers withdrawing their services as advisers of underlying investment portfolios held within pensions schemes and offshore life policies, where the scheme holder or policyholder is a UK national living in the EU. “In addition, savings and investments held with an EU-based institution from 2021 may no longer accept instructions, such as top-ups, from a UK adviser.

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“The financial regulator in France, for example, has already confirmed it will be illegal for French banks and insurance firms to do business with a provider which is not authorised in the country. “We can expect similar positions to be taken by other EU regulators seeking to protect consumers in their country, so this could limit the planning opportunities for expatriates using UK-based advisers. “Affected clients and their advisers need to act quickly to make alternative financial arrangements."If, as seems increasingly likely, the UK fails to reach a pan-European banking agreement with the EU, regulations will revert to a country-by-country basis. A BBA report said: “The UK-based bank could try to look to the national licensing regimes of individual EEA states. However, relying on the domestic legal position of individual EU countries instead of on the pan-EU passport regime, is more limited, complex and costly, and results in a patchwork of outcomes.”