Is your bank account being closed after Brexit? Here's what you can do (2024)

Thousands of British expats living abroad in EU countries are receiving letters from banks telling them their UK current accounts and credit cards will be closed after Brexit.

While not all the roughly 1.3million UK citizens living in the EU will be hit, customers of Barclays, Lloyds and the private bank Coutts living in some of the most popular destinations for expats, including France, Portugal and Spain will have accounts closed if they can no longer prove a UK address.

They will be closed after EU-wide financial passporting rules expire after 31 December, with some banks forced by regulators in individual countries to pull out of offering specific products.

It is a blow to those who keep their UK account open when they move abroad so they can receive their state or private pension into it, who receive income from renting out property or from UK-held investments, or simply to maintain ties to their home country.

But which expats are affected and, more importantly, what can they do about it?

What are the banks doing?

This is Money contacted the five major high street banks to ask whether they had plans to close any bank accounts or credit cards held by UK expats.

The Sunday Times reported last month that Barclaycard credit card customers in Belgium, France and Spain would have accounts closed, but the bank refused to confirm which specific customers would be affected, only that those whose Barclaycard was not linked to a UK address would have their account closed on 16 November if they didn't provide one.

It will write to affected customers in the 27 EU countries plus Iceland, Norway and Liechtenstein, which form the European Economic Area, but insisted only a small percentage of overall customers would be affected.

Some 13,000 customers of Lloyds Banking Group, including stablemates Halifax and Bank of Scotland, will have their accounts closed before 31 December, including retail customers in the Netherlands and Slovakia, and business banking customers in Germany, Italy, Ireland, the Netherlands and Portugal.

It said in a statement: 'We have written to a small number of customers living in affected EU countries to let them know that due to the UK's exit from the EU, regrettably we will no longer be able to provide them with some UK-based banking services. We want to keep customers informed and offer advice on next steps.'

HSBC, NatWest and Santander are continuing the monitor the state of the negotiations, but all told This is Money at this stage they had no plans to close any customers' accounts.

HSBC customers are currently able to keep their accounts open providing they use it once every 12 months.

The MP who chairs the Treasury Select Committee, Mel Stride, last week said it was 'vital' UK expats were given sufficient notice of their accounts being closed so they had time to make alternative arrangements.

The trade body UK Finance said in a statement: 'Where possible, firms want to keep providing banking services to customers living in the EEA after the transition period.

'The impact on each customer will vary depending on the operating model of their bank or provider, the product or service being provided, and the legal and regulatory framework in the country in which they are resident.

'Impacted customers resident within the EEA should be contacted by their provider to inform them of any changes to the services they receive and any actions they need to take.'

What can expats do?

Banks must legally notify customers two months ahead of any closure but most customers whose accounts are due to be closed should have been contacted by now, to give them enough time to sort out their situation.

'The key for expats is not to panic', Rob Hallums, founder of the financial website Experts for Expats, said. 'There are options available and you should not make snap decisions without doing the necessary research first, so be sure to do your own research into the best options available.'

Those living abroad will almost certainly hold a local bank account, and they have a legal right to a basic bank account in the EU country they live in, meaning a UK bank can offer them banking services but without add-ons like overdrafts. Butthe issue, Hallums said, 'is all about being able to receive money in the UK.'

This is particularly important for those hoping to have their pensions paid into a UK bank account which may be about to be closed.

While the Department for Work and Pensions and certain other providers allows retirees to have their state pension paid into a local bank account, many choose to keep it in sterling and convert the money at a later date.

One UK expat living in Greece, Phillip Moss, told This is Money he and his wife kept their Halifax account open for the purpose of having their private and state pensions paid into it, rather than their local Greek account.

This leaves two real options for those impacted who need access to a sterling account. The first is to open a British bank account with another UK bank, but that requires the bank not to be closing its doors in the country in which they live.

While it is difficult for expats without a UK address to open an account, some banks, including HSBC which at this stage say they aren't planning on shuttering their EU operations, do offer accounts to EU residents.

HSBC 'may' be able to consider applications from UK nationals who move to an EU country 'taking account of local regulation'.

Its customers can also benefit from a currency account which lets them transfer money from their UK account into euros and send up to £50,000 abroad with no fee at the HSBC exchange rate.

Crucially, money held in that account is covered by the Financial Services Compensation Scheme, although only up to £85,000 held across all accounts someone may have with HSBC is protected.

But those who receive their pension or other income in sterling so they can transfer it into euros at the most opportune time may also wish to consider a second option.

Rob Hallums added: 'One of the biggest issues that British expats face and that affects so much of their international lives is the currency factor – especially in the current turbulent economic times.

'With global currencies fluctuating massively, we believe it is essential for expats to not just accept the exchange rate at any given time, but that they are able to transfer or exchange money when they can get maximum return in their local currency, and without paying bank charges on top.'

He instead recommended expats consider a money transfer service like Moneycorp, Revolut or Transferwise, which lets customers hold and exchange currencies at a lower cost and a better rate than what is usually offered by banks.

Although they are not banks, with money ring-fenced in segregated accounts rather than explicitly protected by the UK deposit protection scheme, they do offer expats access to UK bank details and accounts which can hold pounds.

Transferwise offers a multi-currency account with access to EU bank details. It is also licensed in Belgium, meaning it will be unaffected by the end of passporting rules.

The account lets customers hold euros, Czech koruna, Danish krone, Polish zloty, Hungarian forint and Swedish krona also comes with a Mastercard debit card and the ability to pay direct debits.

Moneycorp doesn't offer a debit card for expats, but it does offer an online currency conversion account with 33 possible currencies.

And provided they're happy to manage an account on their smartphone, Revolut lets customers open a sterling account, generate European bank details for themselves, or transfer money with a 0.5 per cent fee if an expat wants to convert more than £1,000 a month.

Rob Hallums said these accounts 'help to reduce the exposure to exchange rate turbulence' but warned those thinking of signing up to check they can get their pensions paid into one of these accounts first.