in , ,

Expats face being cut off by UK banks within months due to Brexit

UK banks


MPs have demanded that British banks give citizens living in the European Union fair warning before closing their accounts and credit cards after tens of thousands received letters to say they were being cut off after Brexit.

Lloyds, Barclays and Coutts have written to expats to say that they will stop serving them after the UK leaves pan-European harmonised banking rules at the end of the transition period on December 31. Others, like NatWest, are considering whether to follow suit.

When Britain exits passporting rules, it will become illegal for UK banks to serve customers in the EU unless they apply for banking licences from individual member states. However, the 27 EU countries have a hotch-potch of regulations, so many banks have concluded it is not worth the cost.

The British government said in 2018 that it would make arrangements for European banks to continue operating in Britain after December 31, but the EU has not reciprocated.

The situation could be particularly costly for the 350,000 pensioners among Britain’s 1.3 million expats in Europe. Many will have to pay fees and suffer poor exchange rates if forced to reroute pensions through EU banks.

A recently retired chief executive of a Mayfair financial services company was told last month that his Coutts account, which he says contains “a substantial sum” and into which his pension is paid, will close on December 31 because he spends most of the year at his villa in Portugal.

Mel Stride, chairman of the Commons Treasury select committee, wrote to Chris Woolard, interim chief executive of the Financial Conduct Authority, yesterday demanding that the City regulator lay down ground rules on when and how banks should cut off expats.

Lloyds, which is Britain’s biggest banking group and includes Halifax and Bank of Scotland, has written to 13,000 savings and current account customers, including those with accounts in the Netherlands, Slovakia, Germany, Ireland, Italy and Portugal, to say their accounts will soon close.

Barclays confirmed that its bank account and Barclaycard credit card customers had started receiving letters, but would not say where or how many, citing customer confidentiality. It is understood that customers in Spain, France and Belgium have been told their Barclaycards will be terminated on November 16.

Coutts, whose customers must have £1 million or more to invest, confirmed that it would no longer serve customers based in the EU. NatWest said that it would examine the “final passporting rules” before deciding what to do. Santander, which is Spanish-owned, had no plans to close expat bank accounts.

In a written statement in parliament last week John Glen, a Treasury minister, said that whether banks continued to serve expats was “a matter of local law and regulation and may be impacted by how firms are set up, and what steps they have taken to continue to service customers.

“We expect banks to act lawfully and in accordance with local regulators’ expectations. We also expect that banks work to ensure good outcomes for their customers and provide timely communications to enable them to make appropriate decisions and take necessary steps. If customers are concerned, then they should speak to their provider.”

The FCA said that it would respond to Mr Stride’s letter in the coming days.



Source link

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Loading…

0

Comments

0 comments

Google launches Local Service Ads to aid SMEs and professionals

Google launches Local Service Ads to aid SMEs and professionals

Four tips to enable you to be fully client-fit for 2021

Four tips to enable you to be fully client-fit for 2021