Monthly wrap: What does the closure of expat’s UK bank accounts mean for you?
Currencies Direct November 13th 2020 - 3 minute read
With Brexit fast approaching, many major British banks, including Lloyds, Halifax, and Barclaycard, have warned Brits living in Europe that their UK bank accounts and credit cards will be closed by the end of the year due to the UK leaving the EU.
This means many British expats will have to act in good time before 31st December to avoid issues in accessing their UK bank accounts.
If you are one of those affected by UK bank account closures, we’ve looked at why banks are closing expat accounts, and what you can do to manage your finances.
Why are banks closing expat’s accounts?
As it stands, banks have an arrangement called ‘passporting’ that allows banks to provide banking services to customers in the European Economic Areas (EEA) without having to request direct permission from the particular European country.
However, with passporting rules set to end on 31st December 2020, and a great deal of uncertainty still surrounding UK-EU trade talks, some UK banks are closing UK expat accounts.
This could leave many people in an uncertain limbo, with no direct access to their finances post-Brexit without action before the end of the year.
Nonetheless, passporting will still remain conditional to the agreements reached between the UK and the European Union.
As things stand, however, UK banks will be required to have separate authorisations in every EU country, as well as Iceland, Liechtenstein, and Norway, as of January 1st 2021.
But at present, nobody knows what is going to happen so some banks are acting early by closing accounts in countries they don’t plan to operate in anymore.
That said, it’s not certain how many UK expats will be affected by these closures and which countries will be exempt.
HSBC, for example, said that it is still monitoring the situation and has no plans to close any of its accounts but as the Brexit deadline draws nearer, things could change.
What should I do if my account is closed?
The first thing you should do is check with your current bank to see if there is any way to keep your account open.
Unfortunately, it’s likely you’ll need to retain a main UK residential address to do this, but it is worth explaining your situation to your bank to try finding a solution.
Secondly, see if you can open an account in the country you are in, although you’ll have to consider limits on the type of account you may be eligible for, and think about transfers, exchange rates and receiving payments from the UK.
This is where our services can help if you need to move money overseas before your account closes, or if you need to make transfers out of the UK after 31st December.
Managing your international finances
We’re here to help you make swift, secure currency transfers at great exchange rates. Here are just some of the services we offer.
With our wallet facility you can buy currency and hold it in a digital currency wallet until you need it. Moreover, you can have multiple wallets in multiple currencies, and can even more money between wallets.
Make large transfers ahead of UK bank closures
A number of our customers have decided to move savings overseas ahead of Brexit and the closure of UK bank accounts.
If you’re moving a larger amount our team are on hand to talk you through your options. They’ll also keep you up-to-date with the latest currency news so you can pick the right time to move your money.
Buying currency in advance or fixing an exchange rate ahead of making a currency transfer can be good options if you like the look of the current exchange rate, although you would miss out if the exchange rate strengthened.
You may also want to utilise handy services like limit orders, where you set the rate you want to achieve and your transfer occurs automatically as soon as the market moves to that level.
Automate your regular overseas payments
If you’re transferring money for a pension or have regular business payments, we can automate these payments for you. You pick the payment date and your transfer will be processed without you having to do a thing.
24/7 online transfers
With our online service and app you can check live exchange rates, arrange transfers and set rate alerts 24/7.
If you are affected by the UK bank account closures and you need to transfer money abroad, get in touch with our team who can help talk through our services.