Banking options decrease for British expats
For a long time British expats have been able to continue banking in the UK despite living abroad. Previous policies allowed expats to simply call into their local branch, let the bank know their new foreign address, and continue banking as before – the only difference being that correspondence would be sent to their new home overseas. In recent years, though, security measures have made it almost impossible for expats to open accounts with high street banks in the UK.
The terms and conditions of nearly all major onshore banks now explicitly state that they will only open British bank accounts for UK residents. Even expats with existing UK bank accounts risk having them closed as banks clamp down on foreign account holders. Last year, Barclays customers found this out for themselves with many expats in Cyprus, Greece and Malta being warned that any accounts with a balance of less than £100,000 would be closed. As other banks look to follow suit, expat account holders could expect to face similar such warnings.
The changes come partly as a result of new international banking legislation along with concerns over potential terrorist money laundering. Expat retirees are likely to be particularly affected as many UK organisations – particularly unfunded public schemes such as the military, the police force, and the NHS – will only pay pensions into a bank account based in the UK.
Offshore accounts have been affected by recent developments as well. Low interest rates, combined with increased regulatory costs, have reduced the profitability of offshore banking services in recent years. The recent Panama Papers leak, which revealed how Panamanian law firm Mossack Fonseca aided clients in tax evasion through the use of offshore bank accounts, has only compounded these concerns. Today, banks are increasingly nervous when it comes to taking on clients who wish to move their banking services offshore.
Of course, it’s still possible for expats to open an international bank account, but the opening criteria has become more stringent. The specific rules surrounding the opening of a new account will differ depending on which country you intend to reside in and many specify limits on the size of the deposits they will hold. A typical international bank account may specify a minimum deposit of £5000, for example.
With banking options for British expats narrowing, it’s important to prepare well in advance of moving to your new country. Along with visas, accommodation, health insurance and shipping, it’s highly important for expats to consider their banking affairs before moving abroad. New regulations and policies mean this process is no longer as simple as it once was but seeking advice and doing the appropriate research beforehand should mean any nasty surprises are avoided.
If you are considering moving abroad from London and joining the expat community, Cadogan Tate are here to assist you every step of the way. From your initial enquiry to unpacking at your new home, we are here to help and advise you. Find out more about our specialist international removals services from London.
Information correct at time of publication.