None of the gloomiest predictions of how a Hard Brexit could impact UK expats in the EU has come to pass. But there are complications.
As the long hand of the Brexit clock ticks its final seconds toward Midnight, tens of thousands of expats living in the EU are discovering, much to their dismay, that their UK bank accounts are about to be closed. After the transition agreement expires, on December 31, “passporting” rules that allow financial institutions to provide services across the EU will cease to apply. As a result, UK lenders will have to deal with a bewildering patchwork of national regulators on a country-by-country basis in order to continue offering banking services to their expat customers. Many have decided it’s not worth their while.
Barclays has closed an undisclosed number of accounts belonging to expats in Belgium, Estonia, Italy and Slovakia. Lloyds Banking Group, which includes Bank of Scotland, Halifax and Lloyds Bank, has confirmed it is closing 13,000 accounts belonging to customers based in Germany, Italy, the Netherlands, Portugal, the Republic of Ireland and Slovenia. Nationwide is closing at least 5,000 accounts held by overseas Britons. In total, the lender has 93,000 expat customers in the EU and has not yet decided whether its 88,000 other customers will also face closures.
People who depend on income from pensions and rental properties are likely to be hit particularly hard by this sudden withdrawal of banking services. Some account holders could be left in financial limbo, unable to make vital payments and direct debits. The affected expats are being advised to move their account to an alternative lender in the UK that will continue to offer services in their country of residence. Failing that, they can transfer all transactions to their EU account, which will mean having to pay carry charge fees and conversion charges for any transactions made to and from the UK.
As an expat who has lived in Spain for the last 20 years, I have so far been spared this fate. The probable reason for this is that Spain is home to some 300,000 of the just over 1 million formally registered British residents in the EU — far more than any other EU Member State. As such, it probably makes financial sense for UK banks to continue providing services to expats living here.
But other complications are arising. Like many other British expats living here, I am in a mad rush to exchange my UK driving license for a Spanish one. I don’t own a car or have any need of one, as I live in downtown Barcelona, and very rarely drive in Spain. That said, if I don’t exchange my license before the cutoff date, I will need to go through the rigmarole of passing a Spanish driving test to obtain a license. I have until December 31 to begin the process, which sounds easy enough. But navigating Spain’s labyrinthine bureaucracy is an ordeal at the best of times; in the midst of a global pandemic, with periodic lockdowns making it virtually impossible to even access government buildings, it is a logistical nightmare.
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Nick Corbishley 