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BANKING

How post-Brexit bank changes could affect British people in Spain

As the end of the Brexit transition period looms, the UK has so far failed to negotiate access to the European passporting scheme for banks - here's what that means if you are British and live in Spain.

How post-Brexit bank changes could affect British people in Spain
Photo: AFP

Over the weekend it was reported that, with just three months to go until the Brexit transition period ends, the UK has so far not managed to negotiate a continuation of EU banking rules – known as “passporting”.

This means that all UK banks will need to apply for new banking licences to provide certain services in each of the 27 different EU countries.

And some banks have apparently decided that this is not worth the hassle in certain EU countries and have begun writing to their British customers registered as living abroad to inform them that they will be closing their accounts or cancelling their credit cards.

Tell us: Is your UK bank closing or changing your account?

 

Here we take a closer look at the situation for British people living in Spain.

Is it all banks?

No, it's important to be clear that there is no blanket closure of accounts for all Brits living abroad, it depends on who you bank with and the type of account you have.

Essentially applying for new licences will create a lot more admin for banks.

Banks already have to do this for many non-EU countries so clearly it is possible to do. But there are reports that seem to suggest that some banks are deciding that it's not worth the hassle of doing this for all 27 countries in the EU separately, especially ones where they only have a few customers.

As a country that has a large number of British people living here (at least 360,000 are officially registered) there is a good chance that some banks will decided that it is worth their while to negotiate a licence with Spain.

Is it all account types?

No. Again, this depends on the type of account you have, with straightforward current/checking accounts less likely to be closed. It could also be the case that certain products become unavailable – for example many Barclaycard customers in Spain report being told that they will no longer be able to use their card.

Is it only if I use my Spanish address?

Many British people living abroad use a 'care of' address in the UK for their banking, for example the address of a family member who will forward on all correspondence they receive.

At this stage it seems that only people who have officially changed their address to one abroad are receiving letters from their bank.

Can I challenge my bank's decision?

Banks are free to decide what products they offer and to who, but their decisions can be challenged via the Financial Ombudsman Service – find out more about the procedure to file a complaint here.

The UK government told British newspaper The Times that “the provision of banking services is a commercial decision for firms based on a number of factors” so Brits in Spain probably shouldn't hold their breath for any help from that direction.

Which banks?

We have asked all the major names in UK banking what their policy is for customers in Spain, here are the responses we have received so far. We will update this page as soon as we receive more responses.

Santander – the Spanish banking giant said it was keeping the situation under constant review but told The Local: “We have no current plans to close any of our retail [personal banking] or corporate accounts.”

A Santander spokesperson said: “We have no current plans to close any of our retail or corporate accounts.”

Lloyds – the bank is understood to be closing business accounts – not personal accounts – of customers living in the Netherlands, Germany, Ireland, Italy and Portugal. However the bank said it had no current plans to discontinue any services for customers in Spain

“Lloyds Banking Group currently has no plans to discontinue any of the services we provide to our customers residing in Spain,” confirmed a spokesman in an email to The Local Spain. 

HSBC – A spokesman for HSBC confirmed by email to The Local Spain that current accounts for customers in Spain would not be affected, provided they were used at least once every 12 months.

“HSBC UK customers who reside in the EU will continue to have access to the banking and/or wealth management products and services that we currently provide to them,” said the statement.

“We are monitoring the situation closely, and will keep our customers informed in the event of changes that may impact how we are able to support them.”

And they advised any customers with questions, to check out the comprehensive Brexit FAQs for retail customers.

Barclaycard – Numerous readers  have been in touch to say that they had received letters from Barclaycard telling them that their account would be closed. Barclaycard is separate to Barclays bank and it is understood that Barclays current accounts are not affected, although the company has not commented on the record so far.

Anxiety inducing

However,  those who have been contacted have been left worried at being cut-off without access to their funds in the UK.

“Barclaycard have written to me to say my much beloved and needed card will be useless after October 16th, and final date of 20th,” reported one reader, Avril Cliff who lives in Carboneras.

“I have been searching for a bank here to give me a card, but for most banks I am too old..age 76, fit and able, but cut off is age 72. I have been with Barclaycard for over 40 years…. I do not know what to do as I need a credit card,” she said.

What do the British Embassy say about it? 

The British Embassy in Madrid publised a post on their Facebook page with this message:

“Whether UK banks can service EEA-based customers after the end of the UK Transition Period is a matter of local law and regulation in each country, and may be impacted by how firms are set up and what steps they have taken to continue to serve customers. We expect UK banks to comply with the law at all times,” read the post.
 
“If you are affected, your provider will contact you directly. As we are unable to provide any financial advice, you should contact your bank or an independent financial adviser if you have any questions. More information is available from the UK Financial Conduct Authority HERE

READ MORE: 

Member comments

  1. Standard Chartered Bank has just advised me that I need to close my account with them In Jersey!
    Very annoying.

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For members

SPAIN AND THE UK

Liz Truss: What does the new UK PM mean for Brits in Spain?

Following the announcement that Liz Truss will replace Boris Johnson as the UK’s new Prime Minister, political correspondent Conor Faulkner analyses what this could mean for Brexit and the 400,000 UK nationals who reside in Spain.

Liz Truss: What does the new UK PM mean for Brits in Spain?

On Monday September 5th, it was announced that members of UK’s Conservative party had finally elected a new leader and thus a new Prime Minister, after Boris Johnson was forced to resign at the start of the summer.

Beating rival Rishi Sunak with 57 percent of the vote, just 80,000 Conservative party members elected the former Foreign Secretary as Prime Minister of the United Kingdom and Northern Ireland.

READ ALSO: ‘Iron weathercock’ – Europe reacts to Liz Truss becoming new UK PM

But what, if anything, does her election mean for Brexit and the 400,000 Britons living in Spain? 

Will she be a continuity politician or will she forge a new path (for better or worse) in British-European relations?

Truss the Remainer

During the 2016 EU referendum campaign, Liz Truss campaigned for Remain. “I don’t want my daughters to live in a world where they have to apply for a visa to work in Europe,” she famously said.

Having once been a member of the Liberal Democrats and decidedly more pro-European, Truss’s conversion to Euroscepticism came after she had voted Remain in the EU in the June 2016 referendum.

Did the much hallowed Brexit benefits become clear to her in the aftermath of the result? Possibly. Or, as Brexit became a litmus test of loyalty and Conservatism, did her position shift to fit the intra-party politics of her party?

Although one may hope that her former pro-European positions might mean a softening in UK-EU relations in the post-Johnson era, Truss’s dependence on the Eurosceptic wing of the Conservative parliamentary party during her leadership campaign suggests she may be kneecapped in her ability to strike compromises with the EU.

Truss the Foreign Secretary

Owing to Truss’s tendency to be a bit of a political flip-flopper and change her positions at the whim of career progression, it is therefore quite difficult to predict her future behaviour with regards to Spain. We can, however, make some educated guesses based on her time as Foreign Secretary.

Going off her tenure in the Foreign Office, it seems Truss may view relations with Spain more positively than perhaps with other EU member states or the block as a whole.

In December 2021, Truss travelled to Madrid to meet with her then counterpart José Manuel Albares to build “closer economic, tech and security ties” with Spain, and to “support” the 400,000 Britons living in Spain. 

“We’re significant trading partners, with the UK as Spain’s biggest European investor,” she said, “and the UK as the top destination for Spanish investment. By boosting our trading ties even further, both Spain and every region and nation of the UK will benefit.”

Yet, Truss has also strongly hinted that she would be willing to overhaul Article 16 and put the Northern Ireland protocol at risk. If she is willing to jeopardise peace and potentially break international law to appease her political base in England, particularly within her own parliamentary party, one must wonder about the seriousness with which a few hundred thousand Brits up and down Spain’s costas will be taken. 

Reaction in Spain

Spain’s leading newspaper El País believes Truss will continue the populist strategy of Johnson. Truss was, even in her acceptance speech on Monday, loyal to her predecessor. 

She “promises citizens a rose-tinted future, without clarifying how she intends to achieve it”, the paper believes.

Sue Wilson, Chair of Bremain in Spain, told The Local that she expects Truss to “carry on with the policies of Johnson, and be led, presumably, by the same right-wing forces of the Conservative Party.

“I suspect that, as far as what affects British citizens in Spain, that continuity will simply mean we remain invisible and left to our own devices,” Wilson added.

“Britons in Spain have been left in bureaucratic limbo since the Brexit vote six years ago. Whether it be the ongoing confusion over driving licenses or renewing residency or getting new TIE cards, many Britons abroad have felt abandoned by the UK government.”

Wilson and other members of Bremain in Spain will take part in the National Rejoin March in London on Saturday September 10th to “deliver a warning to the new PM about the impact of Brexit on the spiralling cost of living crisis in the UK”,  to express a “clear and loud message” that “Brexit has failed” and to promote “Rejoin the EU” as a “mainstream” call to action.

“For six years now, Brits living in Europe have been dealing with fear, uncertainty and stress, thanks to Brexit. We have already lost important rights, and many are concerned that even those secured could be at risk. Truss plans to proceed with the Protocol Bill which threatens the legally binding international treaty that secured those limited rights. In the process, she seems determined to do further damage to UK/EU relations and our international reputation.”

Anne Hernández, head of Brexpats in Spain, told The Local Spain: “Our problem as Brits in Spain might be if she actually applies Article 16, meaning a no deal Brexit, and she has threatened that. Although I’m not sure how that might affect our rights.”

The overriding feeling among UK nationals in Spain about Truss in No. 10 is the feeling of trepidation that Hernández describes.

With its fourth leader in six years and the third to take the helm of Britain in the post-Brexit world, for Brits abroad Truss’ rise to Downing Street has prolonged that uncertainty. 

With her apparent willingness to simply tear up internationally binding agreements, many will worry if the situation in Spain will be taken back to square one.

One would hope that her previously positive interactions with the Spanish state could mean that she lends a hand in resolving some of these lingering administrative issues affecting Britons in Spain, but the propensity to change her politics when it suits her make this unpredictable, and her reliance on Eurosceptic forces within her party make it unlikely.

How about Gibraltar?

This unpredictability could be of particular concern for UK nationals in Gibraltar. After voting Remain by a whopping 96 percent, the tiny British territory was not included in the main Brexit deal that came into effect from January 2021, and complicated multilateral negotiations between Gibraltar, London, Madrid and Brussels have rumbled on without resolution. 

Truss’ rhetoric on Gibraltar during her tenure as Foreign Secretary was as combative as her anti-EU talking points during the Tory leadership campaign, continuing the us-against-them language: “We will continue to defend the sovereignty of Gibraltar.”

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