UK Bank Accounts

The problem

A letter arrives giving sixty days' notice that a UK bank account of thirty years' standing will be closed. No reason is given, or the reason given is simply that the bank no longer serves customers resident in that country.

This has become routine. Banks have withdrawn from overseas customers on compliance and cost grounds, and the withdrawal has been indiscriminate: long-standing customers with unblemished records are closed alongside everyone else, because the decision is made by category rather than by case.

Why it matters more than it sounds

Losing a UK bank account is not an inconvenience. It is a disconnection from UK financial life.

The state pension and other UK income are paid into UK accounts. Direct debits for UK obligations run through them. Mortgage payments on UK property are made from them. Credit history, identity verification and the ability to open anything else in future all trace back to having a UK banking relationship. When it is severed, replacing it from abroad is extremely difficult — the same residence test that closed the first account will refuse the second.

Older citizens are hit hardest. They are the most likely to depend on a UK pension, the least likely to be able to restructure their affairs quickly, and the most exposed to the identity-verification requirements that assume a UK address.

What we are doing

Nick Lord, our Singapore coordinator, leads BOVF's policy group on UK bank accounts. The group's proposal centres on a basic account guarantee for British citizens: a minimum level of banking service that cannot be withdrawn purely because the customer lives abroad, in the same spirit as the basic bank account protections that already exist domestically.

We are also collecting accounts of closures, because the scale of the problem is not currently visible in any official statistics — which is part of why it has attracted so little attention.