The U.K. government said senior citizens living in Cyprus should consider diverting pension payments into different accounts as banks on the Mediterranean island remain closed.
“We are advising customers to change the bank account into which payments are made, for example by nominating an alternative bank account or the account of a ‘trusted friend,’” Pensions Minister Steve Webb said in a written statement to Parliament in London today. “This is a practical measure to ensure that payments reach our customers promptly, and we are not advising these customers to close their Cypriot bank accounts.”
The U.K. Treasury set up an arrangement with Barclays Plc (BARC) so that pensioners can open another bank account quickly if they need to do so, Webb said. Staff at the Department for Work and Pensions are contacting individuals in Cyprus by e-mail and phone, he said.
Cypriot banks have been closed except for limited cash- machine withdrawals since an initial international bailout accord was reached on March 16. The government yesterday extended the bank holiday through March 27. Restrictions on money transfers probably won’t be loosened for weeks as the island digests the impact of the European Union decision to close the second-largest Cypriot bank and impose losses on uninsured depositors, Finance Minister Michael Sarris said in a Bloomberg Television interview today.
There are 18,000 British pensioners in Cyprus, a third of whom already get their pensions paid into U.K. accounts, according to the DWP. Last week, the Royal Air Force flew 1 million euros ($1.3 million) to Cyprus for U.K. military personnel stationed on the island to ensure they didn’t run out of cash.
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