Expats Still Face UK Account Closures
Expats in the European Union are still facing difficulties with their UK bank accounts, with some reporting closures without warning. Despite assurances from banks that they would not be targeting customers living in other EU countries, many people are still experiencing problems. This could have a significant impact on those who rely on their UK accounts for day-to-day transactions and business dealings.
After Brexit, UK banks are now restrictively accessible to non-residents.
National Savings & Investments is reminding clients that their NS&I accounts and Premium Bonds must be held in a UK bank account following Brexit.
While the majority of British expats will open a local bank account in their country of residence and look for tax-efficient investments, they are likely to keep their UK bank accounts and investments such as National Savings and Investments and ISA´s.
The reason for this is partly because they are familiar and feel secure, but also because they are convenient. However, many fail to understand that while these investments are tax efficient in the UK, often they are not outside of the UK. Some countries may even penalise these types of investments and tax them more punitively.
For UK nationals living in EU countries, Brexit changed the financial services landscape. Upon leaving the single market in 2020, the UK’s financial advisory services industry lost EU passport rights.
As a result, UK-based financial advisers cannot provide advice to EU residents without the necessary regulatory permission in each jurisdiction where their clients reside. A major consequence has been that many UK-based banks have closed UK accounts owned by EU-resident clients, leaving expats without their bank accounts.
The UK banks began asking British expats to close their accounts as we approached the Brexit deadline in 2020. Initially, there was a lot of media attention, but 18 months later, this faded. In the event that a UK financial institution has not contacted the client yet, it is too early to sigh in relief. In some cases, it takes longer for issues to come to light since the situation is still evolving.
In NS&I accounts, things are a little different, but the consequences are the same.
In addition to being a UK savings company backed by HM Treasury, National Savings & Investments does have some foreign customers. Nevertheless, they must have a UK bank or building society account.
NS&I is now writing to inform British expats that their UK bank accounts will no longer be available to them because of Brexit. To continue to operate an account with NS&I, EU residents must have a UK bank or building society account.
The client is asked to check if they can keep their UK bank or building society account. A UK account in their name must be provided to NS&I if the account has already been closed or the provider plans to close it.
It is a requirement of your NS&I account terms that you are able to maintain a UK bank account, so if they cannot do so, you will need to close your account.” It also includes the ever-popular Premium Bonds, some of which have been held for decades.
This communication is for informational purposes only based on our understanding of current legislation and practices which are subject to change and are not intended to constitute, and should not be construed as, investment advice, investment recommendations or investment research. You should seek advice from a professional adviser before embarking on any financial planning activity. Whilst every effort has been made to ensure the information contained in this communication is correct, we are not responsible for any errors or omissions.
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