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Barclays and other UK financial institutions are closing British expats accounts, what are your options?

More and more British expats are receiving letters telling them that their UK based financial accounts are shortly going to be closed. This article explains the background and various options available if you are faced with an enforced account closure

Written on 4 October 2023

British expats and non-residents with accounts held with UK financial institutions are receiving letters telling them that their accounts are going to be closed, simply because they do not live in the UK.

Understandably such threats are causing people huge amounts of stress and anxiety while leaving very little time for them to make sensible, well thought through decisions.

At Experts for Expats, we regularly receive enquiries around this and while often there are options available, the complexity of living abroad means that solutions are not always as straightforward as you would hope.

This article provides insight into why accounts are being closed and the options you may want to consider if you have been threatened with an account closure.

Why are financial institutions closing bank accounts?

The bottom line is that having customers which are not based in the UK creates expensive regulatory problems for UK based financial institutions which have been exacerbated by Brexit, however the threat of account closures pre-dates the 2016 referendum.

We previously wrote the following article covering Barclays and Lloyds account closures: Options for Expats faced with bank account closures >

It was first brought to our attention when Barclays threatened a number of British expats living in Cyprus, Malta and Greece with account closures in early 2015, unless they had £100,000 and were willing to pay higher account fees.

Pre-Brexit, UK financial institutions were able to passport into the EU ensuring that they were able to provide regulated services. However, since the EU Referendum in 2016 and the UK’s subsequent (somewhat messy) departure from the EU on 2020, passporting into the EU was no longer possible so institutions would have needed to take significant steps to be able to continue to provide services to people living in the EU.

As a result, many firms decided that it was simpler and more cost effective to simply stop providing services to people outside the UK – and started sending out letters saying that accounts would be closed.

Ultimately small numbers of clients in many different countries are simply not seen as cost effective when it comes to meeting regulatory requirements in those countries.

While some providers, including Barclays, have offered different accounts, they have relatively high barriers to entry which many people simply cannot meet.

Which financial institutions have been threatening account closures?

While Barclays have been attracting the headlines since 2015, they are certainly not unique and it is not limited to banks. For example, we have been assisting people with investment accounts with Hargreaves Lansdown and Nutmeg, to name but two others.

In truth, any non-resident holding a UK account may end up receiving an account closure letter so it’s a good idea to ensure that you are prepared if it happens to you.

For example, we have recently been assisting an expat who received notice from Nutmeg telling them that their account would be closed in 3 months. The expat was living in West Africa at the time which further exacerbated their situation as many institutions will have restrictions on countries that they would be willing to open new accounts.

Problems caused by unexpected account closures

For people facing account closures, the main issues are relatively obvious – if they need to make and receive payments, they will need a bank account. They may also need savings and it also has an impact on their credit rating in the UK.

One of the biggest problems, however, is the notice period itself and forcing people into making decisions which they were not expecting at times which may not be practical or sensible.

This forces people to move money when markets are sub-optimal meaning they lose an element of control when moving money around. For example, they may have tie in periods on certain investments which mean they face being penalised for having to move money which they have no choice over.

What options do people have?

Options for bank account closures

If your UK bank is closing your account, unfortunately opening a standard UK bank account is unlikely to be possible once you are no longer resident in the UK.

However, there are a number of expat specific banks offering accounts – depending on your personal situation. We have evaluated a number of the expat bank accounts on the market and have provided a list of them here:

Bank accounts options for expats >

Options for investment account closures

If you have an account with a UK based financial institution which is being threatened with closure, there are investment accounts you can apply for and transfer your funds to, even as a non-resident.

However, this is rarely as straight forward as it sounds due to the complexity of living abroad. Different investments will face different taxes depending on where you live, while there might also be restrictions on opening accounts in certain countries.

For example, many firms will not consider opening an account if you live in the USA (due to increased regulatory requirements of the IRS) or Russia (due to sanctions and restrictions in place with people with Russian connections).

Other factors to consider are future life changes and any expected relocation. If you are planning to move to another country, which is relatively common with expats, it’s important to factor this into any decisions you are making now to ensure you do not have to switch accounts due to relocating in the future.

Who should you speak to for assistance?

Firstly, if you are releasing capital in the UK from an investment platform, it’s important to get UK tax advice as you may be subject to both income and capital gains tax, even if you are a non-resident.

You should also speak to a tax specialist where you live who will be able to advise you about remitting any money into your country of residence and offer potential options to help avoid any unnecessary or expected taxes.

Before making a decision about where you should move any money to, whether it’s to a new bank account or a new investment platform, it is important that you seek advice from an independent financial advisor who will be able to evaluate your immediate, medium and longer-term factors to help you make a more informed decision about your next options.

Request free introductions to get trusted, impartial advice

At Experts for Expats, we provide a range of free introduction services to help you if you are faced with unexpected UK account closures.

We have created a unique network of trusted, independent partners who have substantial experience assisting expats across a wide range of wealth management issues including tax, financial advice and legal matters.

As part of our free introduction service, our partners offer a short, initial consultation lasting around 15 minutes during which you can have general questions answered and connect with a professional who may be able to help overcome the issues caused by unexpected account closures.

To request a free introduction, please use the most suitable link below:

Request introduction to an independent financial advisor >

Request introduction to a UK tax specialist >

See our complete range of tax introduction services >