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French residents with UK premium bonds warned of bank charge risk

Letters sent by NS&I say the bonds may not be practical if you no longer have a UK bank account

NS&I can only make or receive direct payments from a UK bank or building society in sterling Pic: chrisdorney / Shutterstock

Residents in France who hold premium bonds in the UK through the state-owned NS&I are being notified that it might not be practical to keep the bonds without a UK bank or building society. 

Read more: Barclays closes accounts of Britons in France: what about other banks?

This is because NS&I can only make or receive direct payments from a UK bank or building society in sterling, an NS&I spokesman said. 

Customers can receive cheque payments

In the event that a customer wants to cash in their bonds or receive winnings, they can choose to receive a cheque. 

However, cashing in this sterling cheque might incur charges from a French bank, the spokesman said.

Read more: Clinging to UK assets while living in France might not make tax sense

NS&I will not close accounts

“NS&I has not closed any accounts for customers based in the EU that do not have a UK bank or building society account and there are no plans to do so,” he said.

“We contacted customers to let them know that, if their UK bank or building society was to close, it may not be practical to continue to operate an account with NS&I.” 

On the back of UK bank account closures, like Barclays, NS&I began informing clients of the disadvantages of holding premium bonds without a UK bank.  

“It was a requirement for NS&I customers before Brexit,” the spokesman said. 

He advised any customers in this position to contact NS&I to assess their options. 

Premium bond winnings must be declared in France

One customer told The Connexion she was contacted several times by NS&I to inform her of the impracticalities of maintaining her premium bonds without a UK bank. 

However, as it is not mandatory to cash in these bonds, she has decided to keep them.

In France, premium bond winnings are not tax-free – they have to be declared in annual tax returns and are subject to tax in the same way as UK bank interest.

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