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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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LIVING IN AUSTRIA

Eight habits that show you’ve embraced life in Austria

Living anywhere as an international resident will have an impact on your life, but if you recognise any of these habits then you have truly embraced the Austrian lifestyle.

Eight habits that show you’ve embraced life in Austria

Life in Austria can be similar to many other European countries, but there are some aspects that are distinctly Austrian.

Here are eight habits that show you’ve integrated into the Austrian way of life.

FOR MEMBERS: 23 essential articles to help you navigate life in Austria

Indulging in coffee and cake

Coffee and cake is almost as integral to the food culture in Austria as the Wiener Schnitzel.

So say goodbye to the diet, ignore any thoughts of guilt and get stuck into a slice of Sachertorte, Punschkrapfen or Linzer Torte

Preferably with a delicious coffee on the side.

READ MORE: Caffeine, war and Freud: A history of Vienna’s iconic coffee houses

Participating in winter sports

Austria, especially the west of the country, is a winter sports enthusiasts dream.

The Alps offer an almost endless choice in ski resorts, gondolas and mountain huts, with winter sports options ranging from skiing and snowboarding to snowshoeing and Langlaufen (cross-country skiing).

Needless to say, if you live in the Alps, winter sports quickly become a central part of the lifestyle during the cold months. After all, it’s healthy, fun and even a bit dangerous (if that’s your thing).

It’s also a great way to explore the landscape of Austria and get a deeper understanding of the central role of winter sports in Austrian culture.

Downing tools for lunch

Lunch in some other countries (especially places like the UK) is often a sad sandwich while sitting at a desk. 

In Austria however, lunch is an important part of the day and many people sit down at midday with their colleagues or families to enjoy a proper cooked meal.

This is a prime example of the healthy work-life balance that residents in Austria enjoy, and is a much-better habit to embrace than working through a lunch break.

Wearing house shoes

In most Austrian households, people do not wear outdoor shoes inside. Instead, they opt for house shoes, otherwise known as slippers in English or Schlapfen in some Austrian dialects.

Also, many Austrian homes do not have carpet on the floor, which means walking around with bare feet or just socks in the winter can get cold – fast.

So if you’ve invested in a pair of house shoes or, even better, you have a backup supply for guests, then you have fully embraced life in Austria. 

READ ALSO: ‘I’ll probably return to the UK’: Moving to Austria as a Brit post-Brexit

Being punctual

Typically, Austrians are punctual people and don’t appreciate lateness.

For this reason, many international residents make an extra effort to be on time (or early), and it’s not uncommon to become stressed if you know you will be five minutes late.

As frustrating as this can be, it’s actually incredibly polite to be early for a meeting and not a bad habit to pick up.

sparkling water

(Photo by Giorgio Trovato on Unsplash)

Drinking sparkling water

People like to drink sparkling mineral water in Austria.

In fact, sparkling water is so popular that if you order a Mineralwasser (mineral water) in a cafe or restaurant, the sparkling variety is often served unless stilles Wasser (still water) is specified.

Want to be more Austrian? Then simply switch from still to sparkling water.

Stripping off

Countries in Central Europe are much more comfortable with nudity than other nations, and it’s no different in Austria.

The main place to expect an encounter with naked people in Austria is at the sauna. There are even some saunas that have a naked-only admission policy and won’t let people in if they are wearing swimming gear.

People also like to get naked at lakes – especially at the more remote or quieter locations – or at least go topless (for the women). 

The reality is, no one bats an eyelid. So put your prudish instincts aside and don’t be afraid to strip off.

READ ALSO: What are the rules on working overtime in Austria?

Taking sick leave

Employees in Austria are entitled to six weeks of paid sick leave (the number of weeks increases the longer the worker has been employed in the same company).

This means workers are more likely to take sick leave if they are unwell, rather than dragging themselves into the workplace and infecting their colleagues.

The downside though is that Austria has strict rules when it comes to taking sick leave with explicit orders to stay at home. Workers can even expect to be monitored by private detectives to make sure they really are resting at home, as reported by The Local.

For international residents in Austria, this can be hard to tolerate. But the upside is that you’re not expected to show your face in the office when sick, simply to comply with a culture of presenteeism.

And that’s a habit worth embracing.

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