Illustration photo shows a Lloyds Bank branch in London, UK
Around a half a dozen UK banks are to close the bank accounts of Britons living in the EU as a fallout of Brexit, but account holders in Luxembourg may be less impacted.
The issue was first flagged by the UK Treasury Committee in September and thusfar Halifax, Barclaycard and Coutts have announced they will close the accounts of Britons living in the EEA, including Luxembourg. Bank of Scotland and Lloyds said they would close accounts from November for Britons living in Germany, the Republic of Ireland, Italy and the Netherlands. According to Money Saving Expert, a dozen other banks including Barclays, Co-op, First Direct, HSBC, Nationwide, Santander and TSB have said that they are monitoring the situation.
The complication arises because the UK leaves the European Economic Area on 31 December 2020. Unless it reaches a new agreement on its withdrawal from the EU, starting 1 January 2021 UK banks will be subject to laws in respective EEA member countries.
In some instances, banks will be able to “passively serve” their account holders, unless the law in the country they live in expressly prevents it. Whether or not a bank may passively serve customers in a specific country could also depend on the type of products and services they offer. It means that currently the Lloyds Banking Group, for instance, will not close the accounts of Britons living in Luxembourg but will passively serve them.
Delano contacted Luxembourg financial regulator the CSSF for comment but they had not replied at the time of publishing.
Expats with bank accounts in the UK should check with their banks to find out if they can open an alternative account. HSBC, for example, has an online account that can be used while living in the EU. There are thought to be over 1m Britons living in the EU, of which 5,317 were registered in Luxembourg at the start of 2020.