As the UK prepares to leave the EU, you may wonder how Brexit will affect your financial products and services.
The UK is due to leave the European Union in March 2019. The UK and the EU are working on an implementation period which would mean that EU law will apply until December 2020. If this goes ahead, the protections and rights associated with your financial products and services won’t change. Here is some additional information to help you with any decisions you may need to take.
What we are doing
We are planning for a range of scenarios, whether UK gets a deal or not. See a detailed overview of our role in preparing for Brexit.
What will happen during an implementation period
If an implementation period goes ahead, you will not need to do anything unless your provider contacts you directly.
What will happen after an implementation period
We don’t yet know what rules will be in place after 2020 or how your financial products may be affected. We’re preparing for all possible outcomes to make sure that financial services function before and after December 2020.
If there is no implementation period
If you live in the UK
We have plans in place to make sure that UK financial services continue working even if there is no implementation period. The Government is making laws to ensure that firms that are providing financial services from the European Economic Area (EEA) can continue to do so, and that customers are still protected when we leave. Amending EU law may affect your products. If this happens, we expect firms to let you know.
The Government will also put in place a temporary scheme to allow EEA providers to operate in the UK for a period after the UK has left the EU while they get a permanent FCA authorisation.
If you live in the EU or EEA (including if you are a UK expat)
EEA citizens, and UK citizens living in the EEA, could be affected if their UK provider cannot operate in the EEA after Brexit.
Many UK providers are planning to continue providing you services. We expect them to contact you if you need to make any changes. If you have any concerns about whether you might be impacted you may wish to contact your financial product providers.
How Brexit may affect your financial protections
If an implementation period goes ahead, financial products that are protected will remain protected by the various consumer protection schemes in place, including the Financial Services Compensation Scheme (FSCS). This protects you if a firm becomes insolvent. The Financial Ombudsman Service will also continue to apply as before. The Ombudsman Service helps settle disputes between customers and firms.
If there is no implementation period, the Ombudsman Service and the FSCS will continue to cover customers of UK providers operating in the UK.
In addition, we are proposing that the Ombudsman Service will cover EEA firms that enter the temporary scheme. We and the Prudential Regulation Authority are consulting on arrangements for FSCS cover for EEA companies that enter the temporary scheme. Most EEA firms providing UK based consumers with financial products and services are currently not covered by the FSCS. Under the temporary scheme, we are proposing to extend the reach of FSCS cover so that, for the majority of cases, EEA firms will be covered. However, this may depend on whether the firm has a presence in the UK or not. We plan to provide an update once the position is clearer.
Staying safe from scams
During this period of uncertainty there is a greater risk of scams. Here are some tips to protect yourself from being scammed:
- beware of all unexpected calls, emails and text messages
- a genuine bank or organisation will not ask for your PIN, full password or to move money to another account
- never give out your personal or financial details unless it’s for a service you want to use, and where you trust the provider
- don’t be pressured into acting quickly – a genuine bank or financial services firm won’t mind giving you time to think
- always double-check the web link and company contact details in case it’s a ‘clone firm’ pretending to be a real firm
- if you get an email, expand the pane at the top of the message and see exactly who it has come from – if it’s a scam, the email address of the sender may be filled with random numbers or be misspelled
- beware that fraudsters can ‘clone’ these email addresses to make their emails seem genuine
Your provider may want to inform you of changes to your financial product or service in the lead up to March 2019.
If you have any doubts at all about what you are being asked to do, check with your provider. Always use contact details you can trust, for example the phone number on your bank statement or policy documentation.
You can check if a financial services firm is FCA authorised by checking the Register for all authorised companies. Visit our ScamSmart pages for advice about staying safe when talking about your finances.
The Government has published a series of technical notices to explain what could happen if the UK and the EU do not agree a deal. This includes notices on financial services and vehicle insurance and green cards.