Questions about how British banks would work within Europe - and how EU banks could work within the UK - have been circulating ever since talk of the Brexit referendum emerged. However, just a few months before the end of the transition period, negotiation has so far failed to point the way to a post-Brexit future for banking and financial services.
If you live overseas, travel often or have investments or income from elsewhere in the world, you might be wondering what this means for you.
This guide walks through what we know so far about the future of banking for the banks themselves, and for consumers. We’ll also highlight a smart solution for managing your money across borders - no matter what happens with Brexit - TransferWise.
The future of banking in Europe looks uncertain. But no matter what happens with Brexit, you can trust TransferWise for fast, low cost international payments, and simple spending all around the world.
Get a free TransferWise multi-currency account to manage your money across currencies. Avoid excessive bank charges and foreign transaction fees - and switch between currencies whenever you need to, using the easy TransferWise app.
Under EU regulations, banks are able to work across different territories thanks to a bank passport.¹ This makes it far easier and cheaper for banks to offer products and services to customers elsewhere in Europe. Without a passport, banks have to apply for a license to work in each different jurisdiction - a costly and time consuming exercise.
The challenges of banking post-Brexit have been discussed at length, ever since the leave vote came in.² But as yet, there is no obvious solution - leading some banks to cut the services they offer within Europe, and many more institutions warning customers living in the EU that there may be changes afoot.
For Brits living in Europe, there are a number of unanswered questions. It is likely that some banks will choose to stop serving customers based in the EU, with the first few institutions already announcing withdrawal plans.
Without a simple way to manage money across borders this could mean increased complexity and fees when receiving income and pension payments, paying bills in the UK, or exchanging currency between EUR and GBP.
Although many institutions are holding off announcing their post-Brexit plans, some banks are starting to write to customers individually to notify them of changes to the services which are available.
It has been widely reported that Lloyds Bank has already written to account holders in some EU countries, including the Netherlands, Slovakia, Germany, Ireland and Italy, to confirm personal accounts will be closed by the end of the year. Some 13,000 customers are thought to be impacted.³
So far, however, Lloyds Bank has not made any broader statement about its policy on post-Brexit banking for Brits in the EU - the Lloyds Brexit help page says customers who face changes will be notified individually.⁴
Barclays is taking the same stance - asking customers in the EU to ensure their contact details are updated, and sending notification to individuals whose accounts will close.⁵ Customers across the EEA are said to be impacted.
Santander UK has announced that Brits living abroad in Europe will no longer be able to apply for new accounts.⁶ Existing customers may maintain their accounts but will find some activities are restricted - no new applications for overdrafts or extended credit card limits will be available, for example.
Some other banks have offered a more positive outlook for British expats in Europe. HSBC have confirmed that they currently plan to continue considering account applications from Brits living in the EU, and that those with accounts already can continue using them as normal.⁷
Getting a free online multi-currency account from TransferWise is the perfect way to manage your money across borders. You’ll be able to hold dozens of different currencies, and get your own UK bank account details to receive fee free payments in pounds.
You can also count on zero foreign transaction fees with the linked Mastercard debit card and free ATM withdrawals worldwide (up to £200 per month). Just top up your account, switch to the currency you need using the mid-market exchange rate with no markups, and you’re done. There’s only ever a simple upfront fee to pay when you send or convert money, making TransferWise a much cheaper option than a regular bank.
Receive payments in dozens of currencies into your TransferWise account. You’ll also get your own bank details for the UK, US, Eurozone, Romania, Hungary, Singapore, Australia and New Zealand, to make receiving payments simple and completely fee free. See the full details of which currencies you can add and receive to your borderless account, here.
Your TransferWise account will come with your own UK bank account number and sort code. With these you can receive payments, including your pension, just as you would into any UK bank.
Yes. You’ll be able to manage your money online, using the TransferWise app, to send and receive payments. You’ll also get a linked debit card for easy spending and ATM withdrawals no matter where you are in the world.
You can have a direct debit paid out from your TransferWise account in both GBP and EUR . You can also set up a direct debit into your account in these currencies, using your unique local bank details.⁸
TransferWise is fully authorised and regulated by the relevant authorities everywhere services are offered, including the FCA in the UK.⁹ All transfers use bank level security and our team uses advanced monitoring to prevent fraud.
It’s hard to say exactly what banking will look like for British expats post-Brexit. But with a free online multi-currency account from TransferWise, you can always count on simple, low cost international payments, mid-market currency conversion, and simple spending all over the world.
All sources checked on September 25, 2020
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
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