British expats face being locked out of their pensionswritten by Bella Palmer
UK’s exit from the EU has caused some British banks to re-consider which bank accounts they let non-UK residents keep open
UK citizens living abroad face being locked out of their pensions because of post-Brexit rules which see bank accounts shut down.
UK’s exit from the European Union has caused some British banks to re-consider which bank accounts they let non-UK residents keep open.
And finance experts are cautioning that retirees living in Europe are struggling to access their savings as accounts are closed, in yet another Brexit impact.
They say pension providers are less likely to offer services to British expats – resulting in “big problems” in moving pension money into drawdown or making other changes to contributions.
Paul Beard, chief executive of Alexander Beard Group, told The Telegraph that several UK expats had approached him saying their pension provider had declined “point blank” to pay out money.
Philip Teague, of Cross Border Financial Planning, told the newspaper that his company was “starting to uncover some big problems for our clients who have got these very vanilla regular pensions”.
He accused pension providers of failing to offer good advice to older expats who have seen their bank accounts shut about how to access their money.
He said: We are proactively beginning to feed complaints through to them which will eventually end up with the Financial Ombudsman because of (providers’) lack of communication in this area.
HMRC rules mean UK citizens who are a resident overseas cannot move UK pensions to a new firm. So expat pensioners are dealing with complex overseas transfer processes, which can see them lose up to 25% in tax to access their savings.
And moving pension money into drawdown to release an income is regarded “cross-border business” by many providers.
Beard said the policies of some providers were a “dereliction of duty” and breached rules brought in by the FCA earlier in 2023.
Thousands of UK citizens living in European Union countries were told by British banks that their accounts would be closed after the initial Brexit transition period ended. Lloyds Banking Group said it had closed down 13,000 accounts of expats in Europe.
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