Expats are being locked out of their pensions - and Brexit is to blame

Our wonderful Brexit-supporting press reports that British expats who live in European Union countries are finding it increasingly difficult to get hold of their money. They are only three years late to this news, but I suppose we should be grateful that the papers are at last admitting to themselves and their readers that there are downsides to leaving the EU.

The problems began as early as 2020, as the post-Article 50 transition period was coming to an end. Some UK banks decided they would close the accounts of their expat customers on the continent in order to avoid the cost and hassle of getting authorised to operate in each of the 27 different EU countries; something that had been covered by “passporting” while we were a member. Passporting meant that every member of the EU accepted that each others’ financial services industries were as well-regulated as their own and therefore everyone had the right to do business across the whole area.

The Financial Conduct Authority warned back then that banks had to be sure that closing expats’ UK bank accounts would not leave these customers in “undue financial hardship”. But that turned out to mean only that UK banks had to give Brits living in the rest of Europe two months’ warning that they were closing their accounts.

Fast-forward three years and the Daily Telegraph and Daily Express are up in arms. Their readers in the EU (and yes, there are many of them) are finding it harder and harder to access their money from the UK. Since British banks are reluctant to run bank accounts for people who live in the EU27, and since many UK pension funds will only pay into UK bank accounts, the upshot is that some will be unable to access their pensions unless they make different arrangements that might cost them a lot more in tax.

What or who is to blame for this? It is Brexit itself, and also the Brexit deal signed by Boris Johnson and David Frost, who embarrassingly is now a Telegraph columnist. They were so desperate to “get Brexit done” that they signed a bare-bones deal and then sold it as the solution to all the UK’s problems. The list of things they failed to know about, think about, ask for or even insist on is as long as your arm, but one of the most important was the “passporting” of financial services.

Now, three years on, expat readers of the Telegraph and Express are feeling the pinch and getting in touch with the newspapers that told them to vote for Brexit in the first place to tell them how hard life has become as a result. All the papers do it blame “post-Brexit red tape”.

They should be ashamed – this was something experts warned about from the start and one of the reasons they said that Britain needed a financial services deal with the EU. Passporting was just one of the many hard-negotiated but almost invisible deals that increasingly made living and working anywhere in the EU as simple as living in the UK.

But the amateur Brexit backers didn’t listen and didn’t understand. Even the few who did know didn’t care; for them this is just “another price worth paying” – just so long as it is paid by other people.