More long-term British residents of France have been dismayed to receive letters from Barclays Bank requiring them to close their UK accounts.
The letters do not mention Brexit but when the UK left the EU UK banks and financial firms lost the ability to rely on the EU’s passporting system to provide services to clients resident in the bloc.
Closing accounts is easier for banks
The only way they can now legally offer services to such clients is to obtain individual licences to operate in each EU state.
Getting and maintaining these licences is complex and expensive, especially given the small number of accounts involved, so some high street banks have decided instead to close accounts belonging to Britons in the EU.
The Barclays letter states: “We are 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.”
Customers given six months to move accounts
Barclays is closing current and savings accounts (excluding cash ISAs) but say loans and mortgages are being maintained for now. Credit cards are likely to be withdrawn if not already the case.
Clients have six months to find an alternative bank but many fear it will be difficult as Brexit means this is no longer a right, as previously.
Within the EU, residents have the right to a basic bank account in any other EU country.
‘Barclays have shown no respect or loyalty’
Many such letters have been sent out in recent weeks but one reader living in Aude received her letter earlier – in October.
“It came out of the blue,” she said. “Luckily, we already had an HSBC account in the UK so, with some difficulty, we transferred our accounts across to them. But Barclays did not help.
“They did not forward letters from our US pension provider, and they flatly refused to return my documents from their safe (wills, house conveyancing documents, etc). I only got these back when I appealed to the ombudsman.
“I have been with Barclays since I was 17 and I am 77 now.
“They have shown no respect or loyalty. Their attitude was high-handed and left me feeling undervalued and very angry.
“HSBC do not mind us having an address in France, and have been extremely helpful.”
Another reader, a retiree living in Côtes-d’Armor who received his letter in July said: “After 45 years, my account is closed. ‘You are free to go and find another account. Barclays no longer has EU accounts.’ That says it all.”
Miss the deadline and funds will be put into a holding account
French residents often use UK banks to receive UK pensions and other income, to pay expenses during visits to the UK, or to maintain UK property.
The Barclays letters make exceptions for Crown employees serving overseas, for people whose EEA address is for a person who manages the account on their behalf (an accountant or legal trustee, for example) and for people moving back to the UK within the next six months.
It warned that if clients did not close their accounts within the given deadline, they would be closed automatically and any funds transferred to a holding account until claimed.
Customers who leave overdrawn accounts will have their details passed to a legal team to recover the outstanding sums.
What about other UK banks and French residents?
Virgin Money, which owns Clydesdale Bank, is not offering accounts for new customers but continues to service existing ones.
This is the case with Nationwide, Santander and the Lloyds Banking Group, which includes Halifax and Bank of Scotland.
They are maintaining existing accounts but require new customers to have a UK address.
However, HSBC, which is still operating sterling accounts, is also accepting new current account applications.
NatWest did not respond to our queries and its website is unclear.
Christopher Tagg, of financial adviser The Spectrum IFA Group, said: “The best bet is to consult a reliable adviser to discuss account availability and suitability.”