Six years after the 2016 referendum, the full consequences of Brexit are still unfolding. Expatriation has become complicated for UK citizens. International media report that expats are being informed by British banks that their EU-based accounts will soon be closed. In Spain, British driving licenses were also recently rendered invalid.
UK bank accounts in the EU are being closed
Some British banks are informing British citizens living in the European Union that they will no longer be able to have an account in countries like France. From now on, these customers can only keep their accounts if their address on file is in the United Kingdom, i.e., if they live permanently in their home country.
The UK's transition agreement with the EU came to an end in December 2020. During that transition period, British banks were still legally allowed to use their passporting rights to do business in EU countries. According to Investopedia, passporting refers to the right of firms registered in the European Economic Area (EEA) to operate in any other EEA jurisdiction.
For British banks to continue operating in the EU in 2022, they will need new legal permissions and new separate entities in each jurisdiction, i.e. in each EU country. This procedure will cost British banks too much money and involves a lot of complex bureaucracy. According to The Telegraph (July 2022), in order to avoid the hassle, some banks have simply decided to cut services in the EU.
This has put many British expats in the EU in a difficult position. Some, especially retirees, live off the pensions, interests or rent from UK-based properties that are directly debited into these accounts. Many prefer keeping their savings in pounds rather than converting them into European currencies, because the exchange rates can be poor, and the fees charged by EU banks for the conversion can be high. Now, these expats are being forced to withdraw all of their savings and put it into a local bank account in euros or another local currency (e.g., the Danish krone).
In addition, by having their British bank accounts closed, expats also risk losing their Premium Bonds, some of whom have had them for decades. These bonds are an investment product issued by the UK's National Savings and Investment bank. While they generate no interest or dividend, they are automatically entered into monthly draws for tax-free cash prizes. It is a way for British expats, especially the elderly, to keep their money safe, as the Premium Bonds are protected by the UK's Treasury.
Blevins Franks, a financial planning firm for UK expats, has warned expats that they should expect a letter from their bank about the closure of their account even if they haven't received one yet. The firm stresses that banks are still sending letters two years after Brexit came into force in January 2020.
Spain has banned British driving licenses
The UK and Spanish governments failed to reach a post-Brexit agreement about driving licenses by the deadline of 30 April 2022. This means that, since 1 May, tens of thousands of British expats in Spain have been stripped of the right to drive. Tourists are not affected, as they are on a different visa for a stay of less than 90 days. But long-term expats will need to take driving lessons again in Spain and pass the Spanish driving license test.
Spain infamously has one of the most expensive driving tests in the world. Uswitch, the UK-based comparison service, reports that a driving license in Spain costs between 700 and 2000 euros to get, depending on the region and the exact type of license. This is twice as expensive as in the UK. This cost includes driving lessons, a license fee, an obligatory physical examination before the test, and the theory and practical tests themselves. To put things into perspective, the minimum monthly wage in Spain hovers around 1000 euros.
Furthermore, language is also a barrier to passing the test for British expats, who are not all fluent in Spanish. While the theory test can be taken in English, the practical test is conducted only in Spanish. Euro News reports that many British expats are furious at this situation, especially if they had been driving in Spain for over a decade without any problem. Many have turned to social media to vent their anger at this injustice. Some have even formed citizen rights groups that met with the British Ambassador in Spain.
The local British Embassy has announced that it has resumed “intensive talks” with the Spanish government to solve this. The UK already has driving license agreements with 24 other EU countries, says the British Foreign Office, so a solution should be feasible.
However, no new deadline has been set to come to a new agreement, so UK expats in Spain are still stuck in limbo, unable to get behind the wheel.
