I live in the Netherlands and currently have my drawdown pension paid into my UK bank account. However, I’ve just been told my bank plans to stop offering banking services to EU customers. What options do I have?

Anonymous

Tom Selby AJ Bell Senior Analyst says:

This is a situation facing thousands of expats currently living in the European Union and comes as a result of the uncertainty of ‘passporting’ rights resulting from Brexit.

UK banks have been allowed to provide services to customers in the European Economic Area (which comprises the EU plus Iceland, Liechtenstein and Norway) without having to be directly authorised in those states.

However, with the UK now out of the EU and passporting set to expire once the Brexit transition period ends on 31 December 2020, some major UK banking names – including Lloyds, Halifax and Barclays – have already decided to pull the plug and inform customers they will no longer offer banking services to people living in the EU.

Others have kept their cards close to their chest, creating huge uncertainty for EU residents who have their income paid into UK bank accounts – including retirement incomes such as drawdown.

What are the options?

There are a number of avenues you can try ahead of your bank account being closed.

Firstly, speak to your bank and see if there is any way to appeal the closure. This might not be possible as they could insist you’ll need a UK residential address to retain the account, but it’s still worth doing to make sure there are no other viable options.

Secondly, you could consider switching to a UK bank that still allows accounts to be held by residents of the country you live in. However, you need to be prepared for the possibility that a bank which accepts expat customers today might change its policy tomorrow. Despite the uncertainty, this may be the best option available to you.

Finally, you could see if you can have your drawdown pension paid into a local bank account. This is the case for your state pension but many pension firms won’t allow it. You’ll need to speak to your provider to find out if this will be possible.

You should also be aware that this income would be subject to currency conversion risk, meaning the local spending power of the money you receive could fluctuate depending on movements between the pound and the euro.

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