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MONEY

Ask the expert: What are the best UK banks for Brits in Austria?

An increasing number of British high street banks are closing the accounts of their customers who are living in the Austria - so what are the best options if you still need a UK account?

Ask the expert: What are the best UK banks for Brits in Austria?

The great majority of Brits who live in Austria have an Austrian bank account – but many also have accounts in the UK to receive income in the form of pensions, property rentals or work done in the UK, or to hold savings or pay bills in the UK.

Many UK pension providers will only pay into a UK account, while direct debits including mortgage payments can often only be taken from a UK account.

Having a UK account is therefore vital to many, so we asked Ryan Frost, private client adviser at Harrison Brook France, for some advice.

UK high street banks

Most Brits who move to Austria will have an account with a UK high street bank, and in many cases have had the same account for decades. But increasingly British high street banks are telling their customers living in the EU that they will no longer serve them.

READ ALSO: Reader question: Do I need to open a local bank account when moving to Austria?

The latest bank to do this is Barclays, which has announced that it will close all current and savings accounts of its customers who live in an EU or EEA country.

Most other high street banks will not allow you to open a new account without being resident in the UK.

For those who already have an account with a bank other than Barclays, the picture is mixed.

Some banks have already asked customers to close their accounts while others say they have no such plans at present – but account closures is a pattern that has been seen across the EU since Brexit, when British banks began to need separate banking licences for each EU country they operate in.

Ryan said: “Many people have had accounts with, for example, Barclays for 50 or 60 years so are very loyal to their account and used to it, and it’s a surprise to be suddenly told your account is being shut down.

“But since Brexit banks need extra licences to operate in EU countries and many of them are just deciding that it’s not worth it.”

So what are the alternatives?

Expat/international accounts

Many UK high street banks offer ‘expat accounts’ or ‘international accounts’ aimed at UK nationals who live outside the UK.

The major drawback is the cost; many accounts have a minimum deposit level – £20,000 – £40,000 is common – or stipulate a minimum annual income, so they may not be suitable for pensioners, people on a low income or people who just want to use their account for a few basic functions while keeping most of their income/assets in their Austrian account.

Most expat/international accounts also charge a monthly fee and some charge transfer fees on top of that. 

Ryan said: “These are often operated by the bank’s international arm eg HSBC International which is based in Jersey, and they’re really aimed at high-value, working, transient expat types, so they’re not really designed for UK pensioners who are living in France [or Austria], for instance.

“They will give you a UK account number that you can use for pensions, direct debits etc but they often charge high fees.”

Internet banks 

The last few years has seen a proliferation of new internet banks, which offer online-only services and operate across Europe.

The advantage of these is that you can sign up with an Austrian address and then carry out transactions in the UK or Austria using Pounds sterling or Euro.

Many people use internet bank accounts when they first move to Austria before they set up Austrian accounts, but they’re also increasingly being used to carry out UK transactions as they can offer a UK account number and Sort code – vital for certain types of transactions.

READ ALSO: EXPLAINED: Why Austria’s rising property prices are causing alarm

The disadvantage for some people is their lack of a physical presence so in case of a question or a problem contact can only be made by phone or – more usually – via email or chatbot. Most internet banks also do not issue chequebooks or accept queues, which can be a problem for some customers.

Ryan said: “Digital banks are generally where we advise our clients to look, for example Wise (formerly the money-transfer service Transferwise, now set up as a bank), Revolut or Starling. 

These are new challengers on the banking scene and the advantage for Brits living in Austria is that you can “set up both a Pounds sterling and a Euro account and you will get both a GB sort code/IBAN – which will allow you to set up direct debits or receive a UK pension – and an EU account number and IBAN, usually through Belgium.

It means you can use the account for business in the UK, but also transfer money quickly and easily to/from Austria, Ryan says. In fact, for UK pensioners this might give them a better deal on exchange rates than receiving a pension into a UK account in pounds and then spending in Euros in Austria.

There’s a tendency to assume that internet-only banks are less secure, which isn’t necessarily the case, but if there are problems it can be harder to get redress.

Ryan said: “The thing you need to look for is whether the bank has a UK banking licence. Some of them only have an e-money licence – you can still use these accounts but having the UK banking licence means you have the same level of security and fraud prevention as any UK high street bank.”

Austrian banks

Most Brits living in Austria already have an Austrian account for daily life, but can you use this for all your financial affairs?

It depends on your situation, but some UK-based transactions require a UK account.

READ ALSO: What you need to know about opening a bank account in Austria

For example many UK pension providers will only pay into a UK account and if you have property in the UK you will probably need to set up direct debits for mortgage payments, utilities, council tax etc and most of these can only be done with a UK account.

Keeping a UK address

Many UK residents in Austria get around the problem by using a ‘care of’ address in the UK in order to retain their British bank account – usually either the address of a property that they own or the home of a relative.

Whether this is allowed or not is a bit of a grey area.

Ryan said: “This is a bit complicated because there’s a big difference between having UK residency and using a UK address such as the address of property you own or a family member’s address.”

“If you try to open a new account with a high street they will ask you whether you are a resident in the UK.

“For people with existing accounts it’s technically OK to use a UK address as a contact address, but as banks share more and more information sooner or later they will probably ask you whether you are a UK tax resident, at which point you will have to tell them that you are resident in the EU.”

Ryan Frost is a private client adviser at Harrison Brook France, which specialises in offering financial and pensions advice to expats in France.

Member comments

  1. This misinformation is frequently trotted out by many ill-informed or just plain ignorant reporters, including in The Local, and again here by saying, in the context of “…Digital banks are generally where we advise our clients to look…”, “…for example Wise (formerly the money-transfer service Transferwise, now set up as a bank)”. No it isn’t.

    Wise is not a bank, it’s a money transfer company. It does not hold a banking licence, so client money is not guaranteed by government in the same way. It is regulated, but by the FCA under the “Electronic Money Regulations 2011” which is completely different.

    Wise is in my view a good, innovative, company in which I have an account and even hold its shares. But any financial adviser should know what he’s advising on. In this case it’s not a bank. A quick look at wise.com would reveal this to anyone who bothers to look at https://wise.com/help/articles/2949821/is-it-safe-to-keep-money-in-my-wise-account would know. Read the first line: “Wise isn’t a bank. We’re an e-money institution.”

    Do your homework, Ryan.

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For members

GERMAN LANGUAGE

7 ways to talk about money in German

With many of us having to tighten our belts at the moment, here are some uniquely ways to talk about the hot topic of money in German.

7 ways to talk about money in German

1. Geld wie Heu haben

If you’re lucky enough to be extremely wealthy, you may be able to say “Ich habe Geld wie Heu”, though it won’t make you very popular.

The English translation of this widely used phrase is “to have money like hay” –  in other words, to have so much money that it’s barely countable.

As most people don’t have huge hay reserves these days, the phrase likely dates back to the Middle Ages, when the gap between rich and poor, namely between the rural population and the nobility, was particularly stark.

Example:

Seine Eltern haben Geld wie Heu!

His parents have got money to burn!

2. Wer den Pfennig nicht ehrt, ist den Talers nicht wert

This thrifty phrase translates as “he who does not honour the penny is not worth the taler” – taler being an old silver coin. It’s similar in meaning to the phrase “look after the pennies and the pounds will look after themselves” in that it reminds us to appreciate even the small things, and that many small coins add up to a large sum.

(Photo by Philippe HUGUEN / AFP)

The origin of this phrase goes all the way back to the time of Martin Luther in the 15th century, who is said to have written the older version of the phrase Wer den Pfennig nicht achtet, der wird keines Guldens Herr (“He who does not respect the penny will not be the master of a Gulden”) above his kitchen stove in chalk.

3. Geld zum Fenster hinaus werfen

This expression is about wastefulness, and means “throwing money out of the window”.

The phrase is said to have originated in the Middle Ages in Regensburg, where the ruler would stand at the town hall window and throw money to his subjects.

But, since it was their tax money he was throwing, the citizens coined the phrase: “Throwing our money out the window” to describe wastefulness.

Examples:

Du hast schon immer das Geld zum Fenster hinausgeworfen.

You have always thrown the money out the window.

Statt das Geld zum Fenster hinauszuwerfen, sollte er besser mal sparen.

Instead of throwing money down the drain, he’d be better off saving it.

READ ALSO: EXPLAINED: How to get free vouchers to learn German in Vienna

4. Geld auf die hohe Kante legen

This phrase goes back to a time when banks were seen as untrustworthy and people preferred to save their money in a hidden place in their homes.

(Photo by Andre Taissin on Unsplash)

The phrase meaning, “to place money on the high ledge” is still widely used today, as a way of saying “put a bit of money aside” and to save.

Example:

Die Deutschen legen immer einen Teil ihrer Einkommen auf die hohe Kante.

Austrians always put some of their income on the side.

5. Zeit ist Geld

Ok, so this one doesn’t originate from Austria or Germany, but it’s certainly widely-used in the German language.

The expression comes from Benjamin Franklin, the American scientist and politician who wrote it in his “Advice to Young Merchants” in 1748.

READ ALSO: TEST: Is your German good enough for Austrian citizenship?

It since found its way into the German language, which is hardly surprising. And the Germanic famous punctuality fits well with the idea that wasted time is costly.

Example:

In dieser Situation gilt: Zeit ist Geld.

In a situation like this, time is money.

6. das Geld aus der Tasche ziehen

This unpleasant phrase means “to pull something out of someone’s pocket” and is mostly used to refer to scamming, rather than theft.

It usually means to induce someone, in a cunning or fraudulent way, to spend money, or to take financial advantage of someone.

Examples:

Wolltest du mir das Geld aus der Tasche ziehen?

Were you trying to con me out of my money?

Trickbetrüger zeigen sich immer kreativer, wenn es darum geht, ihren Opfern Geld aus der Tasche zu ziehen.

Con artists are becoming increasingly creative when it comes to taking money out of their victims’ pockets.

7. Blank sein

Blank sein – meaning to “be broke”, is a situation most of us have probably found ourselves at one point or another.

The term blank originally meant “bright” or “shiny”, but later, the word came to mean “free of” or “stripped of”, eventually leading to this expression, meaning to be “free of money”.

Example:

Ich würde dir eins abkaufen, aber ich bin blank.

I would buy one from you, but I’m broke.

READ ALSO: 8 TV shows you should watch to learn about Austrian culture

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