Countless UK expats residing in Europe face having to revamp their financial resources in the after-effects of Brexit as British banks close their bank accounts and European ones trek the cost of sending money overseas.
Consumers of some of Britain’s biggest banks consisting of Barclays, Lloyds and Nationwide Structure Society residing in Belgium, Italy, the Netherlands and Portugal have either already had their savings account closed or will see them shuttered in the next few weeks.
Meanwhile This is Cash comprehends that European banks appear to be contradicting EU payment rules designed to restrict the expense of sending money overseas, despite them still applying to the UK.
Around 60,000 expats living in Italy (pictured) are among the worst-affected. Barclays, Lloyds and Nationwide Building Society are all closing expats’ checking account
Banks part of the Single European Payments Location, which the UK stays a member of after Brexit, are not expected to charge more for cross-border payments than domestic ones, whether they are made in euros or not.
The scheme, paired with EU guidelines which entered impact in December 2019, saw British banks like Metro Bank and NatWest cut the cost of sending out money to European bank accounts.
NatWest informed clients two years ago it was eliminating any fees for worldwide transfers made digitally, while Metro Bank cut the cost for euro payments from ₤ 10 to 20p.
However some European banks now seem raising the cost of payments to and from the UK after Brexit, in spite of the UK remaining a member of SEPA.
One British expat living in Spain posted in a Facebook group that his Spanish bank, Sabadell, stated after Brexit the ‘UK does not belong to the EU so the cost to move any cash outside the EU will be 0.75 percent of any deal’, while it would charge him EUR18 to get money from the UK into his Spanish account.
This is Cash understands payment guidelines presented in 2019 which stopped European banks charging more for worldwide non-euro payments than domestic ones have no longer applied to certain payments in the UK considering that 31 December, which is why banks are seizing the day to charge more.
Nevertheless, some overseas payments professionals said they felt the charges were unjustified. Robin Haynes, the creator of abroad payment service Currency Index, stated he felt these charges ‘must not be used’.
‘ Nevertheless’, he included, ‘it has emerged that some EU banks have decided to introduce service charges for payments made to and from the UK. These range from flat fees of around EUR12 – EUR18 for receiving a payment, to percentage charges of in between 0.3 – 0.5 percent for sending out or getting bigger amounts.
How to beat unjust global payment charges
Robin Haynes suggests those sending smaller sized payments between the UK and the EU must change to doing so quarterly or twice a year, to reduce the number of transfers being made. He stated those who felt the charges were unjust need to complain to their bank initially, followed by local regulators and after that the European Payments Council, which supervises the SEPA scheme the UK stays a member of.
‘ The charges differ per bank, and even per client, so are really hard to predict. Some Spanish banks have been especially quick to apply charges, however there have been comparable reports in other EU nations too.
‘ It is our understanding that these charges should not be applied.
‘ Nevertheless, regional regulators and the European Payments Council, who run the SEPA scheme, might not be encouraged to argue the case for UK banks and their clients over EU banks, now that the UK is no longer an EU member.’
This is Money called the European Payments Council for information.
It informed us that while the UK was still a member of SEPA, there was ‘no sign’ that EU guidelines restricting the cost of cross-border payments used after Brexit
It referred us to a July 2020 declaration from the European Commission which stated that: ‘After completion of the transition period, the EU rules in the field of banking and payment services … will no longer apply to the United Kingdom’, consisting of ones governing cross-border payments.
It included problems ought to be made to banking regulators in individual member states.
The news is an extra headache for hundreds of countless expats already facing the impact of Brexit on their personal financial resources. Numerous keep UK checking account open for the purpose of getting cash in sterling to then send overseas, frequently utilizing low expense cross-border transfer services like Transferwise.
But along with being struck with new transfer costs by European banks, many have needed to attempt and figure out brand-new banking plans as British ones close their accounts.
Britons abroad face savings account closures after Brexit.
Some bank account service providers, including Lloyds, have been alerting expat clients because last August that their accounts would be closed as they faced losing European-wide ‘passporting’ consents which permitted them to operate across the continent.
The loss of passporting, cemented by the post-Brexit offer revealed on Christmas Eve, suggests banks need to adhere to the guidelines in each nation and are pulling out of using particular services in individual EEA countries – the 27 countries in the EU plus Iceland, Norway and Liechtenstein – as a result.
The banking trade body UK Financing said ‘a little number’ of the 1.3 million UK people residing in the EU would see accounts closed, but thousands are still captured up in the closures, with the roughly 150,000 who reside in Italy and the Netherlands especially affected.
Is your savings account being closed after Brexit? Bank Response Barclays Current and savings accounts closed in Belgium, Croatia, Estonia, Hungary, Italy, the Netherlands, Poland, Slovakia and Sweden. Barclaycard accounts closed Europe-wide if consumers can not offer a UK address HSBC No prepares to close any accounts Lloyds/Halifax/Bank of Scotland Current accounts closed in the Netherlands and Slovakia, business current accounts closed in Germany, Italy, Ireland, the Netherlands and Portugal Nationwide Building Society Current and savings accounts and credit cards closed in Italy and the Netherlands NatWest/Royal Bank of Scotland No prepares to close any accounts as of December
While banks are expected to give customers two months’ notice ahead of any closure, the full image has just recently ended up being clear and is giving expats a headache.
Derek Humphries, who lives in the Netherlands, wrote on Facebook that 3 of his UK bank accounts had been closed however ‘attempting to set up brand-new bank accounts in the Netherlands seems impossible when you live here however have a UK mobile number.’
Another Netherlands-based expat, Jann Evans, composed in a Facebook group focused on UK residents living in Amsterdam: ‘It took me three months and lots of, numerous call in 2020 to open a Barclays account for abroad citizens and now it’s going be closed. I get lease from my house in UK and live here.
‘ Any tips on what I need to do would be incredibly welcome. Opening a foreign currency savings account here for sterling has very high charges.’
Is your account being closed?
This is Cash formerly put together a guide to some of the options offered to UK expats whose savings account are being or have been closed. You can check out that here. Rob Hallums, creator of the monetary website Professionals for Expats, stated ‘the secret is not to panic. ‘There are options available and you must not make snap decisions without doing the required research initially, so make certain to do your own research into the best alternatives offered.’
Nikhil Rathi, the new chief executive of the Financial Conduct Authority, alerted last year that not all banks were telling customers their accounts would be closed.
Barclays is closing current and cost savings accounts held by those in Belgium, Croatia, Estonia, Hungary, Italy, Lithuania, the Netherlands, Poland, Slovakia and Sweden if they can’t provide a UK address, while it is cancelling credit cards across the continent if holders can not offer an address.
Customers were informed that if they lived somewhere else in the EEA their accounts would stay open, but they might not open any new ones after Brexit, according to one expat Facebook group.
One man who lives an hour outside Valencia in Spain told This is Cash he had ‘previously been on tenterhooks waiting to speak with Barclays’ about his checking account, since his Barclaycard account was closed ahead of Brexit on 16 November.
The guy, who has actually resided in Spain for 20 years, said he wanted to keep his account available to receive his personal pension, in addition to for the convenience of withdrawing cash when he made journeys back to England.
Lloyds, and its stablemates Bank of Scotland and Halifax, has closed current accounts in the Netherlands and Slovakia and service accounts in Germany, Italy, Ireland, the Netherlands and Portugal.
On the other hand Britain’s greatest building society Nationwide is closing existing and savings accounts and credit cards for consumers in Italy on 26 January, while it did the very same for those in the Netherlands at the end of November.
It suggests the 60,000 British expats who live in Italy are among the most heavily impacted by the UK’s departure from the EU and its exit from the single market.
HSBC informed This is Money they had no strategies to close any accounts after Brexit.
We did not get a reaction from NatWest, which also runs Royal Bank of Scotland, but it formerly said it was not intending on closing any accounts.
A representative for UK Finance stated the choice was a matter for individual banks, but said in a statement: ‘Now that the Brexit shift period has concerned an end, a little number of consumers living in the EEA may no longer be able to access banking services from their UK based provider due to the rules that govern how consumers can access savings account and services in different EEA nations.
‘The industry has actually been dealing with authorities throughout the EEA to reduce the influence on consumers.
‘Nevertheless, where modifications to services require to be made banks and other suppliers have actually been calling affected customers and informing them of any actions they need to take.
‘There are a number of alternatives offered for clients who are impacted, consisting of changing to a different UK-based bank, a digital account provider or a bank in the country you are resident in.
‘The very best option will vary depending upon a customer’s private situations and how they use their account, consisting of whether they need to make and receive regular payments in pound sterling.
‘We would therefore encourage customers to thoroughly consider their alternatives and select an account that works finest for them.’