LONDON (Reuters) – Britons living in the European Union could lose access to their UK bank account services and businesses on the continent could be cut off from investment banks in London if there is a no-deal Brexit, the British government said on Thursday.
FILE PHOTO: A Union Jack themed Visa credit card is seen amongst British currency in this photo illustration taken in Manchester, Britain March 13, 2017. REUTERS/Phil Noble/Illustration
In a document detailing contingency planning if Britain leaves the EU in March with no transition deal, the government said unilateral action on several fronts could only minimise disruption up to a point.
While Britons will still be able to use their bank cards to withdraw money in EU countries, over a million UK citizens living abroad may not be able to use their British accounts for borrowing and deposit services, or insurance contracts such as annuities that pay pensions, the document said.
Banks offering these services may also be affected. “This could impact these firms’ ability to continue to service their existing products,” it added.
All Britons will face higher costs to make card payments in the EU when travelling or shopping online.
The EU agreed this year to cap the fees retailers pay to process debit and credit card transactions. Without a deal between London and Brussels, British customers will no longer be covered by a ban on cross-border surcharges, which prevents business from imposing excessive charges on consumers.
The government had previously said those charges cost Britons about 166 million pounds in 2015.
“Leaving the EU without a deal would cause major inconvenience to millions of pensioners, travellers and drivers,” said Hugh Savill, director of regulation at the Association of British Insurers.