How will post-Brexit bank account changes affect UK citizens in Portugal?

The end of the Brexit transition period is looming and the UK has so far failed to negotiate a trading deal with its European partners in the EU.

Now, several UK banks say that they will withdraw all or some banking services from UK citizen clients who have accounts in the UK but are based in European Union countries.
This is because the policy of ‘passporting’ will come to an end, and it will be too complicated and costly in the short term for UK based banks to manage these accounts and the transactions linked to them.
So what does it mean if you are British and live in Portugal? Eight days ago it was reported that with just three months to go until the transition period ends, the UK has failed to negotiate a continuation of EU banking rules — passporting.
Passporting or passporting rights refers to exercising the right for a company registered in the EEA (European Economic Area) to do business in any other EEA country without having to request further authorisation in that country. Put simply, it is a type of passport that financial institutions get to do business across the whole of Europe.
A Spokesperson for the Bank of Portugal, speaking as the banking regulator on behalf of Portugal’s banking sector, told Essential Business: “The Banco de Portugal has developed a set of answers to frequently asked questions (FAQs) within the UK’s withdrawal from the EU for entities that carry out, or intend to carry out, activities in Portugal subject to an authorisation from Banco de Portugal, which can be found at https://www.bportugal.pt/en/page/frequently-asked-questions-brexit#faq.”
“Banco de Portugal does not comment on abstract situations, especially not knowing its full aspects and particulars. However, to the extent that the bank accounts in question are UK-based, and the servicing of such accounts is provided by UK-based entities and reflected solely in those UK-based accounts, referring to pre-existing contracts, Banco de Portugal shouldn’t raise objections to the passive servicing of those accounts for the benefit of UK customers. This understanding is valid for any non-EU citizen with a bank account opened in a non-EU credit institution.”
In other words, the onus and responsibility is being placed on the UK authorities and individual UK financial institutions over active passporting since the EU and more specifically Portugal has not altered it policy towards agreements thus far.
With the end of ‘passporting,’ UK banks will need to apply for new banking licences to provide certain services in each of the 27 different EU countries.
Some banks, namely Barclays, Lloyds and Coutts have apparently decided that it is not worth the hassle to retain UK citizens’ bank accounts for customers who reside in EU countries and have begun writing to these British customers registered as living abroad to inform them that they will be closing their accounts or cancelling their credit cards and should make other arrangements.
Barclaycard users in Portugal were already informed of this decision over a year ago. But does this mean all banks and all accounts?
However, it is important to be clear that there is no blanket closure of accounts for all UK citizens living within the EU and it will depend on which bank you bank with and the type of account held.
Banks in the UK will now have to apply for new banking licences, with each of the 27 countries within the EU, and that will create a lot of administrative paperwork and time, and it may be that the bank account closures only apply to those EU countries for which the bank concerned has relatively few customers to make offering services worthwhile and viable.
Both Spain and Portugal have very large British ex-pat populations (estimates for France vary between 150,000-300,000) while in Spain there are said to be around 360,000 UK citizens.
Portugal, however, is trickier with an ex-pat population estimated at significantly less at around 30,000-60,000. It may be in Portugal’s case banks will decide it is simply not worth while applying for a licence.
And again, it will depend on the kind of account the UK citizen living in Portugal holds in the UK. A simple current/checking account may be less likely to be affected and closed. Alternatively, if you don’t have a registered address in the UK, a family member may be able to help out and provide one.

Using a Portuguese address

Some British people living in Portugal use a ‘care of’ address in the UK for their banking, for example the address of a family member who will forward any correspondence they receive.
It seems likely that only people who have officially changed their address to a Portuguese one will receive letters from their banks.
Those who live in Portugal for less than 180 days and whose registered main address is in the UK will almost certainly not need to worry.
Banks are free to decide what products they offer and to who but their decisions can be challenged via the Financial Ombudsman Service.
A UK government spokesperson told the 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 Portugal probably shouldn’t rely on any support from the British Government.

Which banks are changing policy?

Santander – the Spanish banking giant says it is keeping the situation under constant review: “We have no current plans to close any of our retail [personal banking] or corporate accounts.”
Lloyds – the bank is understood to be closing business accounts — not personal accounts — of customers living in Portugal. A spokesman said: “We have written to a small number of customers living in Portugal to let them know that due to the UK’s exit from the EU, regrettably we will no longer be able to provide them with some UK-based banking services. We want to keep customers informed and offer advice on next steps.”
HSBC – A spokesman for HSBC confirmed on Twitter that current accounts for customers in EU countries like Portugal would not be affected, provided they were used at least once every 12 months.
Barclaycard/Barclays – UK citizens whose registered address in Portugal started receiving letters from Barclaycard as far back as 2018 informing them that their credit card account would be closed and this happened. 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.
Nationwide – a spokesman said no decisions had yet been taken on accounts held by UK nationals living in Portugal. “We are closely monitoring all developments regarding Brexit and are prepared to deal with any outcome.
“Part of this preparedness includes reviewing the ongoing availability of products and services for those members who are resident in the European Union and the European Economic Area.
“Because the outcome of Brexit is not yet clear and the position continues to evolve, there is currently no certainty as to any actions we will be required to take. Regrettably we cannot provide any further detail on the impact on specific products and transactions at this point. However, we will communicate with members as soon as possible about any necessary changes that impact them.”
Coutts, an exclusive private bank which counts some of Britain’s wealthiest expatriates among its customers, said that its clients would have to make “alternative arrangements” for 2021.
National Westminster Bank has also not made any definite decisions on Portugal domiciled registered UK citizens but is also monitoring the situation.