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Banks should "come clean" on plans for expat customers after Brexit, two former ministers have said, as thousands of overseas Britons face an anxious wait on whether they will be able to send and receive vital payments.
The former pensions ministers, alongside industry colleagues, have accused banks of keeping customers "in the dark" over how they will access their money when Britain’s agreement with the EU expires at the end of the year.
Britons living in the EU can send and receive money to the UK using domestic banks under "passporting” rules, but details from the country’s largest providers on what will happen to these services in 2021 have been scant.
This, the industry figures warned, leaves no time for customers to make alternative arrangements if accounts are to be closed. Expats also risk missing insurance policy payments if they are forced to switch banks at short notice, invalidating cover after years of paying in.
There are almost half a million expat British pensioners, according to the Department for Work and Pensions. Most have no idea whether they will have a bank account after December 31.
Baroness Ros Altmann, who was pensions minister under David Cameron, said banks were keeping pensioners “in the dark" over access to their own money.
Sir Steve Webb, Baroness Altmann’s predecessor, now of pension firm LCP, said the fact different banks were taking different approaches to the situation was adding to the confusion.
It echoes calls from MPs who scrutinise the finance industry after this newspaper revealed Britain’s biggest bank, Lloyds, had decided to close down 13,000 accounts belonging to British customers living in the Netherlands, Ireland, Italy, Slovakia, Portugal and Germany.
Steven Cameron, of pension firm Aegon, said: “With continued uncertainty over Brexit negotiations, expats could find their bank account is closed if there is no deal and current ‘passporting’ facilities are scrapped.
“There will be individuals using a British bank to receive payments from, or pay contributions into, a pension scheme. If that account is closed, they will have to make urgent alternative arrangements. The situation is even more urgent if premiums for a life insurance policy were affected, putting ongoing life cover at risk.”
Lloyds has been the only major bank to inform current account customers of its plans so far. Barclays has said it is reviewing the situation and will write to anyone affected in good time. In September it told Barclaycard customers without British addresses their accounts would close from November 16.
Santander and NatWest, which owns RBS, have said they have no plans to close the accounts of any customers resident in the EU at present.
HSBC has a large number of customers in France and has moved some business customers who use its British arm to its French business. It has said it is considering applying for legal permissions to continue to provide services in some foreign countries.
Has your bank written to you about account closure? Write to harry.brennan@Finance.co.uk
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