Two former British pensions ministers have this week called on UK banks to communicate quickly with their customers in the EU about any impacts of Brexit next year.
It comes amid uncertainties about some impacts of Brexit on cross-border banking, pension or insurance services if there is no Brexit deal, with UK/EU talks still dragging on without conclusion so far.
However there is good news from the UK’s Department of Work and Pensions (DWP), which has confirmed that it is certain that UK state pensions can still be paid into pensioners’ accounts in France next year.
The Connexion contacted Baroness Ros Altmann, pensions minister under David Cameron’s Conservative government, and Sir Steve Webb, pensions minister under the coalition government, after a UK national newspaper reported them as saying banks must “come clean” on post-transition plans for expatriate customers and that customers were being kept “in the dark”.
Baroness Altmann said: “I do hope that the banks will inform their customers of the potential risks they are facing.
“Government does not seem to be contacting expats and they have no MP representation in most cases, so they may not realise what the dangers of a no-deal exit are going to be.
“Indeed, even with a deal, it is not clear that international banking transactions or insurance and other financial payments can carry on uninterrupted.
“I feel that banks should be informing their customers about the risks and helping them understand what they might need to do or what might happen.”
She added it was uncertain as to whether all British pensions will still be able to be paid into EU bank accounts, as they may be now, without a deal. “There is no clarity on this at the moment as far as I know,” she said.
Regarding the possibility of certain payments to Britons’ EU-based accounts being disrupted without a deal, Sir Steve said: “We think different banks are approaching this issue in different ways and the impact may vary for different EU countries, so I was calling on banks and financial institutions who are affected and are planning to make changes, to communicate in good time to customers and policy holders so that they can make alternative arrangements if necessary.”
Such uncertainties are compounded by the fact that some banks, including Coutts and Barclays, are looking at closing the UK bank accounts of Britons in France in a no-deal scenario, potentially leaving some people without even this option for receiving payments.
So far, among leading UK banks HSBC and Lloyds have confirmed to The Connexion they have no plans to close accounts of Britons in France.
On the issue of receiving pensions into French bank accounts, a DWP spokesman confirmed that arrangements are in place to continue to pay benefits and state pensions to those who are eligible and who are living in the EU, beyond the end of the transition period.
“The UK state pension will continue to be paid worldwide following our departure from the EU, either into a bank in a pensioner’s country of residence or a bank or building society in the UK,” the spokesman said.
The UK Treasury recently confirmed in a parliamentary answer to Sir Roger Gale MP that civil servants’ pensions may also be paid directly into foreign bank accounts, and that this will continue, though it is unclear if all ‘government’ pensions are included in this (‘government pensions’ refers to those only taxable in the UK under the UK/EU double tax agreement, listed here).
Meanwhile the Association of British Insurers previously told The Connexion that major private pension and insurance providers had made arrangements to be able to continue paying into EU bank accounts, but it advised speaking to your individual providers to check if in doubt.
The UK is expected to remain in the EU's Sepa zone next year, which is expected to continue to facilitate those payments and transfers made in euros under this scheme.