OPINION: Brexit causes yet more money worries for Brits in Spain

Sue Wilson of Bremain in Spain examines concerns over the news that British banks are cutting off customers living in the EU thanks to Brexit.

OPINION: Brexit causes yet more money worries for Brits in Spain
Photo by Nick Pampoukidis on Unsplash

British citizens across Europe have recently received letters from some of the UK’s biggest banks, advising that their UK-based bank accounts will be closed when the Brexit transition period ends.  These closures will apply to credit card and/or current account holders who live in the EU but maintain banking facilities in the UK.

Britain’s largest banking group, Lloyds, started notifying of account closures in August, although not in all EU countries. Lloyds said it had written to customers living in “affected EU countries” to advise it could no longer provide them with “some UK-based banking services”, because of Brexit.

Confusion is increased due to the fact that only some banks are taking this stance, and only in selected EU countries. At present, only Lloyds, Coutts and Barclaycard (not Barclays bank) have notified customers of account closures.


Recent newspaper coverage, especially in the UK media, has done little to curb customers’ concerns about the issue. Headlines warning that tens of thousands of Brits “would be stripped of their bank accounts and credit cards in weeks” have caused sufficient concern that many customers have contacted their financial providers, regardless of whether they’ve received a letter. The responses they received have hardly been enlightening or reassuring.

It’s understandable that answers are vague. While Brexit negotiations are ongoing, and before any deal between the EU and the UK is reached – if one is reached – then the terms for transferring monies to the EU are an unknown quantity. If the current EU-wide banking rules no longer apply to the UK after December 31st, it would be illegal for UK banks to provide services in the EU without a licence.

If no agreement is reached, banks will decide if it is cost-effective to apply for these licences. That decision will be based on the number of customers in a country, and the level of financial activity. You can, perhaps, draw your own conclusions from the fact that Lloyds has written to 13,000 customers in the Netherlands, Slovakia, Germany, Ireland, Italy and Portugal, and not to customers in Spain and France.

The British Embassy responded quickly to British migrants, updating its website with the following statement: “Most people living in Europe should not see any changes to their banking when the transition period ends (31st December 2020). Whether UK banks can service customers living in an EEA (European Economic Area) country is a matter of local law and regulation. Also banks are set up differently, and may have taken different actions to continue to serve their customers. Your bank or finance provider should contact you if they need to make any changes to your product or the way they provide it. If you have any concerns about whether you might be affected, contact your provider or seek independent financial advice.”

Brits living in Spain maintain British bank accounts for many reasons. Whether it is to facilitate UK travel, for business/income purposes, to mitigate exchange rate costs, or mere habit, any changes would be disruptive.

Last week, banking giant, JP Morgan, announced that it will move its £183billion business from London to Frankfurt due to Brexit. This hardly inspires confidence in the UK’s ability to protect the financial services industry.

This was then followed by the news that the UK’s richest person – Brexit supporter, Sir Jim Ratcliffe – is emigrating to Monaco with his estimated £17.5billion fortune. In the grand scheme of the high-flying financial world, it is unlikely that the banking arrangements of a few thousand Brits in Europe are high on the agenda in Westminster or Canary Wharf.

Photo: AFP

Personally speaking, I bank with Natwest and I have yet to receive a letter. My UK bank account is convenient when I’m travelling but it’s not vital. Using a Spanish credit card in the UK wouldn’t be the end of the world. My British state pension is already paid directly into my Spanish bank account, at a favourable interest rate (relatively speaking).

As a Spanish bank account holder with a regular monthly income, this also enables me to save on Spanish bank charges. Regardless of the negotiations, or the banks’ decisions, receiving my pension directly into my Spanish bank account is unlikely to change.

In the grand scheme of things re Brexit, losing banking privileges isn’t as bad as the loss of other benefits and rights, financial or otherwise. Those in a position to mitigate such losses, will do so.  British entrepreneurs are digging deeper into their pockets to retain the benefits of EU citizenship.

So, stop worrying about your UK rental income and exchange rates and head off to Malta, Cyprus or Greece and buy yourself a treat! For a one-off payment of £1million, the Maltese government will welcome you with open arms and all your troubles will be over.

Nothing at all to worry about – it’s only money, right?

By Sue Wilson – Chair of Bremain in Spain


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Banking giant Barclays to close all accounts of Brits living in Spain

UK nationals living in Spain have begun to receive letters from their bank telling them that their accounts will be closed, in an apparent post-Brexit change. Have you been affected?

Banking giant Barclays to close all accounts of Brits living in Spain

Customers of Barclays Bank who are living in Spain and other EU countries have been receiving letters telling them that their UK accounts will be closed by the end of the year. 

A number of readers of The Local’s network of news websites have contacted us to report receiving either letters or messages in their online banking telling them that their accounts would be closed because of their residency in Spain or in other countries in the EU.

A Barclays spokesperson told The Local: “As a ring fenced bank, our Barclays UK products are designed for customers within the UK.

“We will no longer be offering services to personal current account or savings customers (excluding ISAs) within the European Economic Area. We are contacting impacted customers to give them advance notice of this decision and outline the next steps they need to take.”  

Customers are being given six months to make alternative arrangements. The changes affect all personal current accounts or savings accounts, but do not affect ISAs, loans or mortgages.

During the Brexit transition period Barclays closed Barclaycard accounts of customers in Spain, but did not indicate any changes to standard bank accounts.


Around the same time several other British high street banks began closing accounts of British customers who live in the EU, although with the exception of Barclaycard customers in Spain who were largely spared.

Many UK nationals who live in Spain maintain at least one UK bank account – in addition to a Spanish account – sometimes just for savings but others use their accounts regularly to receive income such as pensions or income from rental property or – for remote workers – to receive income for work done in the UK.

Not having a UK bank account can make financial transactions in the UK more complicated or incur extra banking fees.

READ MORE: What are the best UK banks for Brits in Spain?

Since Brexit, the UK banking sector no longer has access to the ‘passporting’ system which allows banks to operate in multiple EU countries without having to apply for a separate banking licence for each country.

And it seems that many UK high street banks are deciding that the extra paperwork is not worth the hassle and are withdrawing completely from certain EU markets. 

When British banks began withdrawing services from customers in the EU back in 2020, a UK government spokesman 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.

READ ALSO: Premium Bond holders in Spain may have to cash in if no UK bank account