Brexit red tape sees British expats locked out of their pensions
UK’s exit from EU has seen overseas residents’ bank accounts closed – leading to ‘big problems’ accessing savings
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Your support makes all the difference.British citizens living abroad face being locked out of their pensions because of post-Brexit rules which see bank accounts shut down.
Britain’s exit from the EU has caused some British banks to re-examine which bank accounts they let non-UK residents keep open.
And finance experts are warning that retirees living in Europe are struggling to access their savings as accounts are closed, in yet another Brexit headache.
They say pension providers are less likely to offer services to British expats – leading to “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 dozens of UK expats had contacted him saying their pension provider had refused “point blank” to pay out money.
Philip Teague, of Cross Border Financial Planning, told the newspaper that his firm was “starting to uncover some big problems for our clients who have got these very vanilla regular pensions”.
The financial planner 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 added: “We’re proactively starting to feed complaints through to them which will ultimately end up with the Financial Ombudsman because of [providers’] lack of communication in this area.”
HMRC rules mean Britons who are a resident overseas cannot move UK pensions to a new company. So expat pensioners are dealing with complicated overseas transfer processes, which can see them lose up to 25 per cent in tax to access their savings.
And moving pension money into drawdown to release an income is considered “cross-border business” by many providers.
Mr Beard said the policies of some providers were a “dereliction of duty” and broke rules brought in by the Financial Conduct Authority earlier this year.
Thousands of Britons living in EU states were told by UK banks that their accounts would be shut after the initial Brexit transition period ended. Lloyds Banking Group said it had shut 13,000 accounts of expats in Europe.
The pensions row comes as the Rishi Sunak government continues to try to ease key banking and insurance rules after Brexit.
Draft legislation set out last month proposes to increase the threshold at which so-called ring-fencing applies to banks from £25bn to £35bn. The ring-fencing rules followed the costly taxpayer bailouts of banks during the financial crisis a decade ago.
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