LONDON: The Brexit rules have put tens and thousands of British expats at risk of having their U.K bank accounts closed in a week, sources informed Frontier Posts.
The banks that are at the verge of shutting down include, Lloyds, Barclays and Coutts as they have started sending notices to their customers of closing down of accounts by 31st December 2020.
The end of the withdrawal agreement makes it a ‘bureaucratic nightmare’ for UK banks to provide for British customers in the EU post-Brexit, with many simply choosing to pull their services.
Banks are making their own decisions as to which EU countries to pull out of and which to continue operating in.
Lloyds Bank confirmed that it will be withdrawing services from Holland, Slovakia, Germany, Ireland, Italy and Portugal in a move that will affect 13,000 British customers.
Barclays also confirmed that its banking and credit-card customers living in the EU had started receiving letters.
One Barclay’s customer, who lives in Brittany, confirmed that she had received a letter saying her Barclaycard will be terminated on November 16, despite being a customer for more than 40 years.
Other Barclays customers living in Spain, France and Belgium have also confirmed that they received notice their Barclaycards will be cancelled.
Another customer said that in order to keep their British accounts, a number of their friends who also live abroad were giving addresses of family members in the UK.
In the post-Brexit world it will become illegal for UK banks to provide for British customers living the EU without applying for new banking licenses.
The government has failed to negotiate post-Brexit banking rules and so pan-European banking rules, known as passporting, will no longer apply to these customers.
Rather than negotiate the specific banking rules of 27 member states, which has been described as a ‘bureaucratic nightmare’, some banks are closing their customer’s accounts.
In a statement, the Treasury said:
‘We expect banks to treat their customers fairly and provide timely communications to enable them to make appropriate decisions.’
‘However, the provision of banking services is a commercial decision for firms based on a variety of factors, including the local law and regulation of specific EEA countries, ‘ said the Treasury.
Two other major UK banks, NatWest and Santander have said that that they had no plans to close customer’s accounts but are “considering their options to do so” On the other hand, Tuesday’s labour market report due at 06:00 GMT.
After shedding 220k jobs in the three-month period to June, the UK economy is expected to have lost a further 125k posts in July.
The jobless rate is projected to tick up from 3.9% to 4.1% in the three months to July.
This would compare favourably to other countries such as the United States that have seen the unemployment rate hit double digits.
However, with the UK government’ furlough scheme ending in October, many are warning of a tsunami of jobs losses without any fresh support.