Expats could lose access to UK bank accounts under no-deal Brexit

More than 300,000 pensioners may lose access to their pensions if the UK is unable to agree a Brexit deal, the government has warned.

Both British pensioners living on the continent now with UK-based pensions and those who used to live or work on the continent and have EU pension entitlements could be affected. The loss of arrangement could also impact EU pensioners living in the UK.

The admission comes as the government published the first in a series of papers outlining the possible impacts of a no-deal Brexit,

Under Brussels pensions rules, funds that cross borders can only be paid into a bank account registered in an EU country.

Pensioners who have worked in the EU and now live in countries outside the union are currently made to open bank accounts in an EU state to collect their funds.

The UK will become a “third country” on 30 March 2019, sparking the risk of expats and former expats with British bank accounts having their payments cut off.

The Brexit secretary, Dominic Raab, insisted he was “confident that a good deal is in our sights”, as he launched 24 “technical notices” in Westminster, a series of papers telling businesses and the public how to prepare if no deal is reached.

The problem could also deliver a major blow in Ireland where former Northern Irish workers of employers based in the Republic of Ireland, or vice versa, could be unable to access their pensions without crossing the border.

The Financial Conduct Authority (FCA) has already announced plans to mitigate the impact for savers with EU-based pension benefits, later this year consulting on a “temporary permissions regime” for EU companies to continue to access the market.

But there is no indication as to whether this would be reciprocated by the EU.

Holiday-makers and Brits abroad could face millions of pounds in surprise credit and debit card charges in the event of a no-deal Brexit, it has emerged.

The Treasury had said that the card charges, which were banned in January, cost Britons £166 million in 2015.

Clients of UK-based financial services firms who are themselves based in the UK are “unlikely” to be affected if there is no deal over Britain’s departure from the European Union.

ABOUT THE AUTHOR
Pedro Gonçalves
Pedro Gonçalves is Financial Correspondent at International Investment.

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