Your decision to become an expat and move to, say, Spain or Portugal, may mean that you lose your UK bank accounts. Changes to financial services in the wake of Brexit, following the UK’s exit from the Single Market, mean that many UK-based banks are asking EU-resident clients to close their accounts, accounts which they may have used for many years.

“Most British expats will open a local bank account in their country of residence,” said Jason Porter, director of special expat financial advisory company Blevins Franks. “They will also look for new tax-efficient investment opportunities. But many will also retain their UK bank accounts and often also keep UK investments such as National Savings & Investments and ISAs. This is partly for convenience but also because they are familiar and feel secure.

“But times have changed. Brexit rewrote the financial services landscape for UK nationals living in EU countries. When the UK left the European single market at the end of 2020, its financial advisory services industry lost EU passporting rights. This means that UK-based financial advisers are no longer automatically authorised to give advice to EU or European Economic Area residents unless they have the necessary regulatory permissions in each jurisdiction their clients live in.”

One major consequence has been that many UK-based banks have had to close UK accounts owned by EU-resident clients, leaving expats without the bank account they may have used for decades.

“As we approached the Brexit deadline in 2020, many British expats received letters from their UK banks asking them to close their accounts,” said Jason Porter. “There was a lot of media attention about it at the time, but 18 months on this has died down. However, it’s too early to breathe a sigh of relief if your UK financial institution hasn’t contacted you yet. The situation is still evolving and some issues take longer to come to light.

“We have recently seen letters sent from Barclays Personal Banking in the UK and National Savings & Investments asking clients with EU residential addresses to close their accounts.”

UK bank accounts

In their letter to a client living in Spain, the Personal Banking division of Barclays explains:

‘Please take action: we need you to close your account.

‘We’re applying limitations to the banking services we provide to customers with an address in the European Economic Area (EEA). We’re sorry to say this means we need you to close your account… To keep using your savings and/or current account with us, everyone on the account needs to be living in the UK and all the addresses we have for you need to be in the UK too… There are some limited exceptions that allow you to keep using your accounts with an EEA address.’

The letter, dated 10 May 2022, gives the client until 24 November 2022 to confirm whether an exception applies, provide a UK address or close their accounts, following which the accounts will be closed on or after 2 December 2022.

National Savings & Investments (NS&I)

The situation with NS&I accounts is a little different, but linked, with the same consequence.

As its website explains, National Savings & Investments has always been a UK savings provider, backed by HM Treasury, but it does have some customers who live abroad. However, they still need a UK bank or building society account in their name.

“Since many British expats have had no choice but to close their UK bank accounts following Brexit, NS&I is now writing to inform them that this will affect their ability to continue holding their accounts,” said Jason Porter.

The letter advises EU resident clients:

‘You need to have a UK bank or building society account to be able to continue to operate an account with NS&I.’

It asks the clients to check if they can continue to hold their UK bank or building society account. If it is already closed or the provider plans to close it, they need to provide NS&I with details of another UK account in their name. If they cannot do this, then:

‘You will need to close your NS&I account – this is because it’s a requirement of the terms and conditions of your NS&I account that you are able to hold and maintain a UK bank account.’

NS&I includes the ever-popular Premium Bonds, some of which may have been owned for decades.