Latest Round of UK Bank Account Closures for Expats

Following the end of the Brexit transition period, UK financial services firms are no longer able to ‘passport’ financial services into Europe.  This means that UK financial services firms and banks can no longer promote or offer new contracts to expats resident in Europe unless the bank opens a branch in that country and then is directly authorised with the local banking regulator.

More Expat Accounts Closing

Over the last couple of years, if you are an expat and have a UK bank account, you are likely to have been written to advising that your UK account will shortly be closed if not closed already.  Over the last few days, we have been contacted by a couple of clients with Barclays and First Direct (part of HSBC) accounts with notice of account closure.  It appears that banks are moving into their final phase of bank account closure given the lack of progress in financial services being included in the Brexit Trade Agreement and the 5 Memorandums of Understanding to allow “delegated authority” when any EU regulator delegates regulatory authority to the UK’s Financial Conduct Authority (FCA) and the banking regulator (part of the Bank of England), the Prudential Regulatory Authority (PRA).

The Problem

As mentioned above, UK finance firms cannot promote services to EU residents.  This means that many existing contracts can remain in place, but the contract cannot be changed, and you must work within the existing contract terms.  If the terms change, then the account can no longer be used by an expat.  Banks are continually changing their terms and conditions meaning that most expat accounts must close.

New UK Accounts

To open a UK bank account, you must live in the UK and have a UK address.  If you do not, you cannot open a UK account.

Existing UK Accounts

This is a difficult one.  Any existing UK accounts and contracts that were established before Brexit should be allowed to continue provided there is no change in the contract.  Sadly, banks are continually changing their terms meaning accounts must be closed or they have no facility to block marketing activity for expat clients meaning again they would breach EU rules and are making the decision to close expat accounts.

Conclusion

It is inevitable that most UK bank accounts for expats will close.  Many expats are now turning to ‘challenger banks’, i.e., newer banking groups that tend to offer digital only banking services such as Revolut and Wise.  These accounts offer multi-currency accounts with Bank Account Numbers and Sort Codes across a range of countries and currencies of usually between 30-50 local currencies.

In short, even when overseas, you can still access a UK account number and sort code.  That said, we issue a note of caution in that you should open one of these accounts before you leave the UK because if you only open a digital account when you are overseas, you may only get an IBAN (international bank account number) on your ‘Foreign’ digital account that can still hold sterling but as most of Europe is moving away from sort codes and account numbers and just using IBANs, UK systems, pensions in payment in particular, may not cope if you then want a UK sort code (despite the fact that the IBAN is made up of a bank code, branch code (sort code) and account number as they still operate on the old BACS clearing system.