Barclays has announced plans to shut down the UK current and savings accounts of British expatriates, a move set to affect thousands of customers. The decision, confirmed on Monday, will potentially leave these customers without access to their savings and pensions. The bank has been issuing a six-month notice to affected customers, urging them to transfer their funds.
This development comes after a review of Barclays' international offerings initiated in 2021. A spokesman for the bank stated that "UK products are designed for customers living in Britain". The bank advised expats to open a global account with Barclays, however, this requires maintaining a balance of £100,000 to avoid a £40 monthly charge.
Barclays' approach mirrors the actions of Lloyds Banking Group (LON:LLOY) in 2021, which informed 13,000 expats living in Europe that their UK-based accounts would be closed as it was no longer permitted to offer services.
Under the latest closures by Barclays, holders of cash ISAs and fixed-rate bonds residing in Estonia, Italy, the Netherlands or Slovakia will have their accounts closed. Similarly, mortgage and loan holders registered outside the UK will not have their accounts closed but will be unable to remortgage at the end of their term. Crown employees and their spouses are exempt from these closures.
The Financial Conduct Authority (FCA) clarified that banks can set their own rules concerning the residency of account holders. However, they must comply with local laws and regulations when serving customers outside the UK. The FCA also stated that it expects banks to treat customers fairly and provide adequate notice if they decide to close an account.
The decision by Barclays is influenced by the expiration of "passports", an arrangement allowing financial services in the UK to trade across the European Economic Area (EEA) due to shared regulatory frameworks. While the UK has legislated for EU banks to continue providing services to customers in Britain, the EU has not reciprocated. This situation has led to UK banks being unable to provide current or savings accounts to retail customers in certain EEA countries, such as the Netherlands.
The closure of accounts is expected to impact "a small percentage" of Barclays' overall customer base. Customers who believe their accounts have been closed unfairly have the right to complain to the Financial Ombudsman Service.
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