Banks cut expat customers adrift

Ted_Bloke

For the most recent decades it has no longer been considered extraordinary and eccentric to live abroad, or at least in Europe. According to a couple of articles in The Times yesterday banks may now consider it is:

"Banks cut expat customers adrift

UK financial services lost “passporting” rights to operate in the EU because of Brexit, meaning they can no longer legally serve customers on the Continent unless they obtain banking licences from individual member states. 

...many banks have calculated it is easier to cut ties with customers... if they cannot provide a UK address. 

Barclays has been writing to customers in 28 European Economic Area countries over the past few months telling them their bank and savings accounts will be closed...

It had previously shut accounts only in a few countries but has now decided to close them Europe-wide...

If their UK bank account is shut down, expats will also have to cash in their Premium Bonds and any other accounts with National Savings and Investments, which is owned by the Treasury. A UK bank account is needed to have savings with NS&I."

(Sorry if my links are behind paywalls).

https://www.thetimes.co.uk/article/banks-cut-expat-customers-adrift-0c63c0zmt

This is going to be very inconvenient for some people. Another article explains that HSBC is the only bank continuing to offer a service, but it may be inconvenient or a hassle to set up an account there. Many people would like to keep the bank they may have had for a lifetime, which they perhaps use for various different services. In any case if there is only one that makes it precarious. Then it tells us there are other specialised services but...

https://www.thetimes.co.uk/article/living-in-the-eu-heres-how-brexit-could-affect-your-uk-bank-account-88btzbr0m

What do you need to keep your existing banking? The articles repeatedly say a UK address. Address? Like just a place to send letters and documents concerning your account? They say address, not residence, residence for tax purposes, domicile, or anything formal.

But as this is for regulatory reasons: "UK financial services lost “passporting” rights to operate in the EU because of Brexit, meaning "they can no longer legally serve customers on the Continent unless they obtain banking licences from individual member states" I can't believe that anything so informal, which you might more easily arrange, will suffice. And wouldn't your bank see if you have significant foreign transactions and enquire, be obliged to do so?

I wonder if anyone with relevant experience and knowledge and give it an idea can give an idea of how this will run – of how you can manage this 'address' question.

Brie

My understanding is that Barclays (and other banks) have been writing to customers about this for the last 18 months at least.  So it's not recent news.  And I also understand that this is due mostly to banking regulations in those various countries which are too onerous for UK banks to deal with.  

Having a UK address while living in France or Austria is completely do-able.  But.  It means having complete trust and co-operation with someone at that address.   So you could cite your son's or daughter's or best school buddy's address as your own but would then need to trust them to not intercept your new debit/credit cards and pins and ensure those items and info are forwarded to you within a reasonable amount of time.  I'm sure that lots of people do this on the pretense that they don't live permanently in the EU which is the only way I know one can truthfully get around this.  

So if you have this trusted individual you could get you state pension, investment proceeds paid into your UK bank account and then once every quarter transfer a chunk to your account near your "holiday" home.  Whether something would go snap when dealing with other UK institutions (HMRC?  DWP??) I don't know.

SiliconChip

As an expat you probably didn't have a chance to vote in the referendum, but the responsibility for this Brexit bonus, along with all the other wonderful benefits it has given us, lies fairly and squarely with those who voted to leave.

lr1277

Be careful with the UK address. In certain situations the bank will require you to present yourself in branch and show valid ID and address confirmation (e.g. utility bill or driver’s licence). At least once a month I see on here a thread where a customer is required to go into branch and show their credentials.
The one instance that applied to my family is that my dad has mental capacity issues and is no longer capable of managing his finances. My mum and I have POA for him, just not registered with the bank.
We needed a change made and called the bank’s customer service. Whilst providing his ID details, my mum and I were prompting my dad. The CS operative heard this and stopped the account. The only way to resolve was to visit a branch with valid photo ID and proof of address. There may be ways around this like the bank’s website, but these were not available to us.

There might be other situations where you are required to present yourself in branch:
fraud situation
AML situation 
lost/stolen card depending on the circumstance of the loss or theft

Not saying any of these will apply to you, just be aware. Also it might be really easy for you to visit the UK and go to a branch, in which case this situation is not a problem.

lr1277

I have no experience of any of the following, but they may solve your problem.

Account with an app based bank, though I don’t know their residency requirements. Also would mean moving away from a bank you may have banked with for many years. Also would mean keeping your smartphone well connected signal wise and also uptodate operating system wise. This can provide its own set of challenges..


Some banks have international divisions based in Jersey or Guernsey. Same British bank, just a different part of the bank. But I believe these banks impose fees for running the account. But they allow you to have an address outside the UK.

Another option might be a multi-currency account with Wise. Again I don’t know their residency requirements.

lr1277

Sorry to harp on about this, but there may be times when you cannot travel internationally to the UK. I am thinking of pandemics or a volcano shutting down travel. You may be able to convince your bank you are abroad for a valid reason other than living there (should you choose), but they may still want you to visit a branch depending on the problem.
Then you stuck financially till you do visit.

Daliah

lr1277 said:

I have no experience of any of the following, but they may solve your problem.

Account with an app based bank, though I don’t know their residency requirements. Also would mean moving away from a bank you may have banked with for many years. Also would mean keeping your smartphone well connected signal wise and also uptodate operating system wise. This can provide its own set of challenges..

Doesn't work for EU residents, as currently none of the app-only based banks have a licence to offer banking facilities to EU residents.

lr1277 said:

Another option might be a multi-currency account with Wise. Again I don’t know their residency requirements.

Wise works as they have an EU licence but they aren't a bank, so have no FSCS protection


The easiest for those stuck without a UK account is the HSBC Basic Account, which is officially available to EU residents. Can be a hassle to set up though as you might have to apply in a UK Branch, after having made an appointment.

[Deleted User]

If you choose to live outside the UK such issues should be expected. To add I know a couple of people that lived in the EU when we was in it, and opening a bank account was like trying to get access to the pope! Yes it was possible. 

Exodi

Deleted_User said:

If you choose to live outside the UK such issues should be expected. To add I know a couple of people that lived in the EU when we was in it, and opening a bank account was like trying to get access to the pope! Yes it was possible. 

Opening a bank account where - Do you mean opening a UK account with an EU address, or opening an EU bank account with an EU address (as an expat)?

I think when my parents permenantly moved to France, they kept their UK account with a UK address (for pensions and things to be paid into), and opened a French bank account in France. They then transferred money between these as required.

I don't think opening the French account was a complete walk in the park, but I think this would be the case for any country if someone just turns up with "I've just moved here, I don't speak the language and I have no native identification - can I open an account please?"

SusieT

I would see what happens with the individual banks. It seems (from a friend living in Germany) that they cannot give an overdraft, an account with extra services or a savings account, but if you already have a basic account then it can stay open. Barclaycard have an operation in Germany separate from the UK one and there is also the Barclays Investment bank there, so they already have a setup in EU possibly a reason for them wanting to pull out? Some banks will not offer accounts to people in specific countries and others will only offer a basic service. Best is to wait and see if other banks follow, and if they need a UK address perhaps use one of the virtual addresses who do forwarding if you do not have a friend or family in UK to have mail sent to.

Daliah

SusieT said:

Some banks will not offer accounts to people in specific countries and others will only offer a basic service.

If by 'basic service', you mean a basic current account: not all of them do (HSBC the notable exception), but a basic current account is perfectly good for everything (online/app banking, making and receiving payments, SO, DDs) apart from an overdraft. Overdrafts should, IMO, be avoided like the plague, anyway, as they are one of the most expensive ways of borrowing.

Other than the HSBC basic account already mentioned, all UK current account applications require that you are a UK resident. You may or may not be able to continue to hold an existing UK account if you move abroad.

SusieT said:

 Best is to wait and see if other banks follow, and if they need a UK address perhaps use one of the virtual addresses who do forwarding if you do not have a friend or family in UK to have mail sent to.

Wait and see - for what? You can ask your bank straight away whether you can keep your account(s) if you move abroad. Some will let you, others won't. If you don't have existing accounts - see above for new applications.

I think using the address of relatives / friends / a commercial forwarding service is generally not a good idea, not only because it could breach the T&Cs but also because they might require you to appear in Branch if for some reason they have blocked your account.

All of those complications can be avoided quite easily though by choosing the HSBC Basic, or - if you aren't bothered about FSCS protection - by using a Wise multi currency account. Even Revolut, which also doesn't have FSCS protection, might be an acceptable option for some, though I would not recommend them as their CS has a pretty dreadful reputation.