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Bank accounts are used by millions of people for important financial decisions, as well as their day-to-day money needs. However, there has not yet been a definite resolution to the ongoing Brexit talks, and so people have been advised to prepare for every eventuality. A number of people have received letters from their bank to inform them of impending changes, which could involve the closure of their bank accounts.
The individuals who are affected are those who are currently living in European Union countries – commonly known as expats.
At present, there are over one million UK citizens who are resident in the EU, and while not all will be affected, the changes are worth bearing in mind.
Bank accounts could close in just 11 days time under current circumstances, causing upheaval for those who are affected.
The closures can be attributed to so-called ‘passporting’ rules, which are in place across the entire European Union.
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These rules are in place to allow UK banks to trade as part of what is known as the European Economic Area (EEA).
However, once the Brexit transition period ends at the close of 2021, passporting will no longer be in place.
This means the UK will not be subject to the same regulatory framework as countries in the European Union.
The transition period is currently set to end on December 31, unless there are any eleventh hour changes, meaning new rules will kick in from 2021.
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From January, lenders will be required to have licences which are country specific in order to provide certain bank accounts, or even mortgages.
This leaves expats with just a number of days to sort out their affairs, and ensure access to funds.
After December 31, certain banks have communicated they will be withdrawing their offering of certain products.
Nearly 13,000 Lloyds Banking Group customers received letters informing them of upcoming closures in the Netherlands, Portugal, Ireland, Germany and Slovakia.
The letter, Lloyds stated, would enable customers to remain informed about the upcoming situation, and help them with their next steps.
Similar correspondence has been received by some customers of Coutts and Barclays.
Nationwide has written to 5,000 customers across the Netherlands and Italy informing them of potential closures.
A spokesperson for the building society recently told Express.co.uk: “As is the case with a number of UK-based financial services providers, due to changing rules regarding UK accounts held by those in some EU territories, customers residing in those areas will no longer be able to use their accounts going forward.
“As such, we have had to write to our members in Italy and the Netherlands to let them know that, as a result of the end of the Brexit transition period on 31 December 2020, we will no longer be able to provide them savings accounts, current accounts or credit cards in their jurisdiction.
“We want to give our members time to make alternative arrangements, in the meantime we will update them with further information as soon as we can.”
While the news is likely to be frustrating for many people who are living abroad, it is important to take action ahead of the deadline.
People should check with their bank first to see if they are offering any advice on what steps they should take next.
These experts are likely to be able to provide tailored insight to assist Britons who are in this position.
Otherwise, some may wish to explore their options for banks which are currently offering accounts in the country of residence, even after passporting rules expire.
While this could change in future, it could provide a good short-term solution for those who are affected.
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