Thousands of British expats living in Europe are facing bank account closures. Details on the post-Brexit outlook are hard to predict but planning for the future is essential.
Banks across the UK have foregone their right to trade under EU banking rules. Because of this, many of them have announced bank account and credit card closures for British citizens living in Europe. Some expats still rely on a UK bank account to receive pensions or payments from investments like rental properties. Finding an alternative banking solution is vital. Here are some of the changes we can expect to see in the future, how they may affect you, and the alternative options available.
How will banks be affected by Brexit?
The UK banking sector has been hit hard by Brexit. Banks in the UK and EU have been heavily intertwined for years but the disparate financial regulations between them will ultimately affect the level of service they can give expats.
When part of the EU, the UK was able to operate freely across the European Economic Area (EEA) under passporting rules. As part of Brexit, the UK Financial Conduct Authority (FCA) would need to negotiate a new set of regulatory rules for financial activity with the EU. UK banks have taken pre-emptive action and severed ties amid fears that an agreement won’t be reached.
The impact of this change will depend on your bank and the country you're currently living in. It’s always best to check on your UK bank's website for more information if you haven’t been contacted directly yet.
Can I keep my UK bank account after Brexit if I live abroad?
As it stands, expats living in Portugal, Spain and France will be the most impacted by post-Brexit bank account closures. Barclaycard has confirmed that its credit card customers in Belgium, France and Spain will have their accounts closed. Customers with Halifax, Bank of Scotland and Lloyds could face similar closures. Expats who bank with HSBC and Santander are still able to receive banking services for the time being.
Not all account options are off the table — Barclays are offering basic accounts to expats, as are Natwest and Nationwide. However, this could change in the future. Before you start making plans, contact your bank and find out what your choices are.
What steps do I need to take to look after my account and my money?
There are several options available to expats facing bank account closures. You can choose to open a basic account with your current bank or similar, but you may run the risk of closures in future when a Brexit deal has been decided.
You also have the option to open an international payment account with a foreign exchange specialist. This is particularly pertinent for expats who hold assets in the UK, such as rental properties, as some financial regulators in EU countries (such as France) have stated that local insurers and banks may not work alongside UK-based providers. An international payment account would allow you to withdraw your pension or handle payments for overseas properties 24/7 from your phone or laptop. In addition, you can rely on access to exchange rate tracking tools to target the best rates and avoid losing out on the value of the transaction.
There’s plenty of time to arrange alternative banking options, so be sure to contact your local bank and find out what’s available before you proceed. To start exploring your international payment account options, find more information here.
Alternatively, if you find your business bank account will be affected by the post-Brexit changes, you might want to consider working with moneycorp for your corporate foreign exchange.