Many of the 1.8 million British expats living in Europe will have their UK bank accounts closed imminently because of Brexit – and they should urgently seek alternatives to “sidestep avoidable issues.”
“We only have a matter of weeks until it will become for illegal for most UK banks to service many clients in the EU,” said Nigel Green, the chief executive and founder of financial advisory, deVere Group, which has more than 80,000 mainly expat clients.
“This will cause considerable disruption for many individuals, families, businesses and other organisations, especially where there are larger deposits, standing orders, regular payments and credit facilities to another bank,” said Green.
Green urges those who could be affected to urgently seek alternatives with providers that already operate under pan-European rules to sidestep avoidable issues.
The financial advisor warned: “Many Britons who live in Europe face being stripped of their UK bank accounts and credit cards within weeks, because of the failure of the EU and Britain to agree rules for operating after Brexit.”
“Most of the major UK banks are already writing to customers to inform them that they will no longer be able to provide them with banking services, unless they have a UK address,” he said.
UK banks will no longer be allowed to provide services to customers in the EU without the right banking licences, when Britain formally leaves the bloc on 31 December.
Currently, they operate under a ‘passporting’ system, which allows banks in the EU to trade freely in any other state in the European Economic Area (EEA) without the need for more authorisation.
To operate without passporting becomes enormously complex, incredibly time-consuming and very expensive for banks. This is the reason why they are ditching many of their customers across Europe – even if they have been with them for decades.
“We only have a matter of weeks until it will become for illegal for most UK banks to service many clients in the EU,” said Green.
“This will cause considerable disruption for many individuals, families, businesses and other organisations, especially where there are larger deposits, standing orders, regular payments and credit facilities to another bank,” he said.
It is encouraged that those who could be affected should seek alternative institutions or banks that already operate under pan-European rules to sidestep avoidable issues.
Borderless payments
There’s a growing need for clients to have borderless access to, and management and use of their money. Challenger banks and fintech firms are stepping up as traditional banks are now having to routinely abandon their customers due to Brexit.
Last month, deVere Group reported that Vault, its global money app and card service, has experienced a jump in enquiries of 67% in Q3.
The app allows users to deposit, store, transfer and exchange money in most major currencies. The deVere Vault Prepaid Mastercard® can be used online, in-store and at any ATM location across the globe where Mastercard is accepted.
Pensions after 31 December 2020
There will be no changes before 31 December 2020 to the rules on claiming the UK State Pension in the EU, EEA or Switzerland as a result of the UK leaving the EU.
If you are living in the EU, EEA or Switzerland by 31 December 2020 you will get your UK State Pension uprated every year for as long as you continue to live there. This will happen even if you start claiming your pension on or after 1 January 2021, as long as you meet the qualifying conditions explained in the new State Pension guidance.
If you are living in Spain by 31 December 2020, you will be able to count future social security contributions towards meeting the qualifying conditions for your UK State Pension.
If you work and pay social security contributions in Spain, you will still be able to add your UK social security contributions towards your Spanish pension. This will happen even if you claim your pension after 31 December 2020.
If you are considering moving to Spain on or after 1 January 2021 and you are not covered by the Withdrawal Agreement, the rules depend on negotiations with the EU and may change. Check our guidance on benefits and pensions in the EU.
You can continue to receive your UK State Pension if you live in the EU, EEA or Switzerland and you can still claim your UK State Pension.
For information on tax-related matters if you live and work abroad, but have UK-based income then read more here.