TOP MP SOUNDS THE ALARM ON BREXIT BANK ACCOUNT CLOSURES
Yahoo! Finance 29 September 2020 - by Oscar Williams-Grut
Lord President of the Council and Leader of the House of Commons Mel Stride arrives for Theresa May's final cabinet meeting as Prime Minister at 10 Downing Street on 23 July, 2019 in London, England. Today's announcement of a new Conservative Party leader and prime minister, most likely Boris Johnson, is expected to trigger ministerial resignations from critics of the no-deal Brexit approach ahead of a major Cabinet reshuffle. (Photo by WIktor Szymanowicz/NurPhoto via Getty Images)
The head of one of parliament’s most influential committees has urged the UK’s financial regulator to make sure Brits abroad are given enough warning of Brexit bank account closures.
Mel Stride MP, chair of the Treasury Select Committee, on Tuesday wrote to the head of the Financial Conduct Authority (FCA), urging the regulator to make sure people were given “sufficient warning” of any account closures.
“Many British expats in the EU are being told that their UK bank accounts will be terminated at the end of the year,” Stride said.
“It’s vital that they’re given sufficient warning so that they have time to make alternative arrangements. I’ve asked the FCA what length of notice period it considers sufficient, and how they make sure that firms adhere to it.”
The correspondence follows reports of banks writing to customers overseas warning their accounts would be closed as a result of Brexit. Banks including Barclays (BARC.L) and Lloyds (LLOY.L) have written to expat customers saying they will no longer be able to serve them after 31 December, warning accounts could be closed within weeks.
The account closure notices come amid expectations that the EU and UK will fail to strike a deal on financial services by the end of the year. Most in the City of London expect a “skinny” Brexit trade deal, which would not cover finance.
Under such an outcome — or a no-deal outcome — banks and other financial institutions would no longer be able to use “passporting” rights to serve customers across the EU.
PensionBee, an online pension provider, warned on Monday that expats could face disruption getting their pensions paid out as a result. Most pension providers pay one bank account. Setting up a new linked account if that primary account is closed requires paperwork that could take weeks to process.
“We urge pensioners living abroad to plan ahead and ensure they have sufficient funds in place to cover their living expenses for several months,” Romi Savova, the chief executive of PensionBee, said.
Over one million Brits live in the EU, many of them relying on UK bank accounts.