Brits in EU slide into Brexit banking limbo as some UK banks shut their accounts
Thousands of Brits residing in the EU have been informed by UK banks that their EU-based bank accounts will soon be shut.
A range of British banks, including Barclays, have told UK citizens living in the EU that they will no longer be able to have and use their account in member states, primarily in Spain, France and Germany.
They have been told they can only keep their UK bank accounts if their permanent address is in the UK, so if they are deemed living permanently in Britain, according to the international news site Expat.
Costs and paperwork
Following the end of the transition period, which ended in December 2020, British banks who wish to continue operating legally across the bloc, special legal permissions are required for each EU market individually.
As a result, many British banks have come to the conclusion this exercise is too costly and requires too much paperwork for a relatively modest amount of customers.
Therefore most UK banks have decided to pull out of the EU consumer banking market altogether.
However, this puts tens of thousands of Brits across the bloc into an awkward position. Many retirees in Spain, who are permanently based there, receive their pensions and other income via their UK accounts.
Moreover, most Brits in Europe have a savings account with a British bank, in British pounds.
This group now faces the choice to either base themselves permanently in Britain or transfer all of their savings into a local bank Account.
Premium Bonds
Finally, Expat reports that the closure of bank accounts also leads to British citizens losing their Premium Bonds, some of whom have had them for decades.
These bonds are an investment product issued by the UK’s National Savings and Investment bank.
While they generate no interest or dividend, they are automatically entered into monthly draws for tax-free cash prizes, the website explains.
“It is a way for British expats, especially the elderly, to keep their money safe, as the Premium Bonds are protected by the UK’s Treasury,” according to Expat.
Blevins Franks, a financial planning firm for UK expats, has reportedly warned Brits in the EU that they should expect a letter from their bank about the closure of their account even if they haven’t received one yet.
The firm stressed that banks are still sending letters two years after Brexit came into force in January 2020.