Chaos as banks shut expats' accounts amid fears over restrictions after Brexit transition ends on January 1

Thousands of British expats who live on the European continent are facing banking chaos as UK lenders cancel accounts and scramble to prepare for life outside the EU and

The end of the 'standstill' post-Brexit transition period on December 31 will see British banks having to abide by different rules if they want to operate in mainland Europe. 

Brexit means they are losing so-called 'passporting' rights which allow them to provide services and products across the continent.

From January 1 they will need country-specific licences in order to provide certain products which has prompted some banks to terminate services, with expats told mortgages, credit cards and savings accounts are being withdrawn.

The end of the 'standstill' post-Brexit transition period on December 31 will see UK banks subject to different rules if they want to operate in the European Economic Area 

'Passporting' rights allow UK banks to operate across the European Economic Area which comprises of the EU's 27 member states as well as Norway, Iceland and Lichtenstein. 

The end of the transition period will spell the end of those arrangements, with tens of thousands of British expats now facing a banking shake-up. 

The red tape associated with getting permission to operate in individual countries has reportedly led to some banks deciding it is not worth the hassle. 

Worried expats have got in touch with the MailOnline to share their banking woes. 

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Michael Fitzgerald said:  'We are affected by the closing of our accounts in the UK. We have been banking with Lloyds for over 50 years. By the middle of September we received a letter telling us that our accounts would be closed by November 2. We immediately phoned Lloyds and were told that they did not have a trading license in the Netherlands and Slovenia and therefore had to close our accounts. 

'We tried to get a UK account with other banks, but found that they either did not answer the phone (due to Covid etc etc) or they announced on their website that due to Covid they did not take on new clients.

'We have relatives in the UK, RAF pension, life endowment policy, standing orders, a house etc. So we were faced with loads of problems. Trying to get in touch with all these insurance companies, HMRC, Equinity etc. is a nightmare. 

'We have decided to sell our house in the UK, surrender the life policy and maybe leave some savings in the Barclays account if we can contact them. Needless to say that it has caused enormous stress to us.' 

Mike Jones said: 'I was first 'dumped' by Barclays Bank in 2015 after 53 years with the Bank, so transferred to the Bank of Cyprus, now Cynergy Bank as I live in Cyprus. At the beginning of November, I was told that they are also going to close my account on 30 Dec 20.

'I immediately contacted 3 other UK banks to try and open an account, but have only received an acknowledgement from one.

'The situation is compounded by my Pension providers, including DWP not replying to my emails and phone calls asking them to suspend payment until I can arrange new banking facilities. 

'Things are getting desperate what with the Christmas holidays approaching, limited postal services from Cyprus due to lack of aircraft and the Virus, but I'm sure that there are others worse off.

Alan Nelson said: 'My wife and I have lived in Spain for almost 19 years now,

'We have had a Barclays Bank Account, in the UK since 1973, we also had (it was withdrawn from us in November of this year) a Barclaycard for many many years.

'Additionally, we had monies invested in Barclays wealth (originally invested in 2003) which we have been compelled to sell at the very time when stocks/shares are low.

UK expats who live in the Netherlands and Slovakia face having their personal bank accounts closed by Britain's biggest bank Lloyds after Brexit

'In order to maintain a UK based bank, we have felt it necessary to open a special expats account with HSBC which means we must maintain a minimum balance of 50,000 pounds.

'Barclays have not notified us whether they will be closing our current account or not it seems impossible to get information from them.'

One UK expat living in Greece, Phillip Moss, told This is Money he and his wife kept their Halifax account open for the purpose of having their private and state pensions paid into it, rather than their local Greek account.

This leaves two real options for those impacted who need access to a sterling account. The first is to open a British bank account with another UK bank, but that requires the bank not to be closing its doors in the country in which they live.

While it is difficult for expats without a UK address to open an account, some banks, including HSBC which at this stage say they aren't planning on shuttering their EU operations, do offer accounts to EU residents. 

Some 13,000 customers of Lloyds Banking Group, including stablemates Halifax and Bank of Scotland, will have their accounts closed before 31 December, including retail customers in the Netherlands and Slovakia, and business banking customers in Germany, Italy, Ireland, the Netherlands and Portugal.

It said in a statement: 'We have written to a small number of customers living in affected EU countries to let them know that due to the UK's exit from the EU, regrettably we will no longer be able to provide them with some UK-based banking services. We want to keep customers informed and offer advice on next steps.'

Meanwhile, Santander has reportedly told expats they can keep their current mortgage but will not be able to borrow any more money. 

Barclays has apparently said savings and current accounts for expats in Italy, Estonia, Slovakia and Belgium will be terminated.

A Barclays spokeswoman told the newspaper: 'The Financial Service regulator in those countries has made clear that they expect non-EEA banks - which Barclays UK becomes after December 31 - to cease the provision of these services to customers in their countries.

'Continuing to provide services even on a passive basis may be viewed as a criminal act.'

One banking executive told The Times it had been 'an absolute nightmare' trying to figure out which products could continue to be offered and where. 

A spokesman for the Treasury said: 'We expect banks to treat their customers fairly and provide timely communications to enable them to make appropriate decisions.'

Banks must legally notify customers two months ahead of any closure but most customers whose accounts are due to be closed should have been contacted by now, to give them enough time to sort out their situation.

'The key for expats is not to panic', Rob Hallums, founder of the financial website Experts for Expats, said. 'There are options available and you should not make snap decisions without doing the necessary research first, so be sure to do your own research into the best options available.'

'Those living abroad will almost certainly hold a local bank account, and they have a legal right to a basic bank account in the EU country they live in, meaning a UK bank can offer them banking services but without add-ons like overdrafts. But the issue is all about being able to receive money in the UK.'

This is particularly important for those hoping to have their pensions paid into a UK bank account which may be about to be closed.

While the Department for Work and Pensions and certain other providers allows retirees to have their state pension paid into a local bank account, many choose to keep it in sterling and convert the money at a later date.

The MP who chairs the Treasury Select Committee, Mel Stride, previously said it was 'vital' UK expats were given sufficient notice of their accounts being closed so they had time to make alternative arrangements.

The trade body UK Finance said in a statement: 'Where possible, firms want to keep providing banking services to customers living in the EEA after the transition period. 

'The impact on each customer will vary depending on the operating model of their bank or provider, the product or service being provided, and the legal and regulatory framework in the country in which they are resident.

'Impacted customers resident within the EEA should be contacted by their provider to inform them of any changes to the services they receive and any actions they need to take.'