British expats risk being 'stripped of their UK bank accounts' post-Brexit

British expats risk being 'stripped of their UK bank accounts' post-Brexit

Britons abroad face losing their UK bank within weeks, because of the UK government's failure to agree rules for operating after Brexit. 

Lloyds, Barclays and Coutts have started warning EU-based customers they will stop servicing them at the end of the year, according to The Sunday Times.

As part of the EU, UK-based financial businesses could "passport" into Europe, but if there is no new agreement on this before 31 December, then banks would need to apply for new banking licences separately with individual EU countries, which would be time-consuming and may not make financial sense.  

Most of the UK's high street banks are plotting to unceremoniously abandon their customers across Europe within weeks."

Lloyds Bank confirmed it will pull services from Holland, Slovakia, Germany, Ireland, Italy and Portugal - a move that impacts 13,000 Brits.

Barclays also confirmed bank and credit-card customers living in the EU are being warned their accounts may be closed.

Customers living in Spain, France and Belgium have received notice their Barclaycards will be cancelled on November 16.

‘Unfortunately, we now need to let you know your account will be closed on November 16, if you don't provide us with a UK residential address,' an email sent by Barclays read.

Coutts also confirmed it will be no longer serve customers based in the EU, and told Brits they will have to make "alternative arrangements".

NatWest and Santander have said they currently do not have plans to shut down accounts, but are "considering their options".

If pan-European banking rules no longer apply to the UK once the Brexit transition period ends on December 31, it would become illegal for UK banks to provide services for British customers in the EU without applying for new banking licences.

Jason Porter, director of specialist expat advisory firm Blevins Franks notes that passporting is currently possible because the UK Financial Conduct Authority is bound by the same rules and standards as other regulators in the EU. 

"But once the UK leaves the EU, the regulation of financial activity and consumer protection may not continue to line up on both sides," Porter said in a note. "As such, unless a mutual deal is agreed on financial services, the EU will not permit ongoing passporting arrangements for UK financial businesses and advisers from 1 January 2021."

In a statement, the UK Treasury said: 'We expect banks to treat their customers fairly and provide timely communications to enable them to make appropriate decisions.' 

'However, the provision of banking services is a commercial decision for firms based on a variety of factors, including the local law and regulation of specific EEA countries.'

For Nigel Green, CEO and founder of deVere Group, UK banks are "outrageously failing" many tens of thousands of expat clients across Europe.

Green says: "Most of the UK's high street banks are plotting to unceremoniously abandon their customers across Europe within weeks.

‘Accounts will be shut and debit and credit cards voided - regardless of how much or how little you have in those accounts or how long you have been a client - as it becomes illegal for UK banks to service British customers living in the EU without applying for new banking licences.'

He continues: ‘Once again, traditional banks are outrageously failing their clients who now need to take urgent steps to continue to be able to access, use, and manage their money.

‘The move by these banks will be a major inconvenience to many tens of thousands of Brits living in the EU.'

Before post-Brexit rules come into effect, those affected are being urged to find alternatives to avoid potentially serious financial disruption.

‘I would urge expats to now seek a financial services provider that already operates under pan-European rules,' said the deVere Group CEO.

Boris Johnson has just a month to strike a deal and 101 days before the transition period ends.

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