Now UK Banks Can?t Turn Expatriates Away

21.09.16

Please note that this article is over six months old. While Blevins Franks takes care to make sure that information is accurate on the date of publication, some content may change over time. You should not rely on the accuracy of legislation and tax information in this article; take professional advice for your circumstances.

A new EU law should benefit expatriates by ensuring improved access to bank accounts, transparency over fees and freedom to switch between accounts across the EU.

A new EU law should benefit expatriates by ensuring improved access to bank accounts, transparency over fees and freedom to switch between accounts across the EU.

If you have ever been turned down for a British bank account, you will know that UK-based banks can be difficult to access once you no longer live there.

Many banks have only accepted customers who have a fixed UK address, and could discontinue accounts for those who no longer have proof of residency. For expatriates living abroad this can make it extremely difficult – and expensive – to maintain financial links back in the UK. This is a particular problem if, for example, your UK pension scheme will only make payments into a British bank account.

This month, however, a new EU law is coming into force which will make sure UK banks – and all banks across the EU – offer more freedom and flexibility.

Freedom to open accounts throughout the EU

From 18 September, all banking providers in EU member states have to provide a basic account for any applicant, no matter where they live in the EU or their personal financial situation. The accounts they offer will be no-frills but must let you do the essentials, like receive your salary and pensions, make withdrawals and pay bills. For most expatriates, this should be enough.

Although banks can no longer discriminate on the basis of residency, they still have the right to reject applications, for example, due to money laundering concerns. However, they now have to explain the reason for rejection, for free, and offer you the right to appeal.

Compare account fees easily

The new rules will force banks to be more transparent about the fees they charge for their accounts and services. Each EU country must now also have at least one independent comparison website to show the fees charged by its banks and payment service providers.

Change bank accounts simply and quickly

A new standard, automated process will make it much easier to switch between banks, even across borders. Your existing provider must deal with all the steps involved in moving your account within 15 days if your new provider is in the same country, or 30 days if it is elsewhere.   

What this means for you

All this is good news for British expatriates. The new EU rules bring more freedom to choose the bank products that suit your needs, wherever you are based, as well as more flexibility to hold accounts in more than one country. You will be able to easily compare providers and make a more informed choice about the best option for you, without having to worry about hidden charges.

A positive knock-on effect of the new rules could be more competitive rates from banks as well as cross-border products that can offer better deals for expatriates. The simple, short and free switching process will let you take advantage of attractive offers and lower costs from different banks, in the UK or anywhere else in Europe.

Whether these new freedoms will be affected once Brexit takes place and the UK is out of the EU is uncertain. However, for the next two years at least, you should find UK banks will no longer be able to turn you away for basic services and you can enjoy the freedom to switch as it suits you.

Any questions? Ask our financial advisers for help

Tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice.

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