No UK pensions payments to Cyprus
British pensions will not be paid into Cypriot bank accounts for the foreseeable future and expats are advised to open UK accounts, the Department for Work and Pensions said.
In a statement to MPs, pensions minister Steve Webb said the Government is advising people to either switch their payments to a British account they already have or to open a new one.
About 6,000 of the 18,133 British expats on Cyprus use a British bank account already and so are not affected by the freeze.
Mr Webb said: "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' which is permissible under our current rules on benefit payment.
"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. Customers who do not currently have another bank account may wish to open one. HM Treasury have also worked with Barclays to put in place a process so that individuals can open a bank account quickly if they wish to do so."
The freeze on benefit payments into Cypriot bank accounts was announced by Treasury minister Greg Clark last week amid reports that the government in Cyprus was planning a levy on all accounts to fund a bailout.
The plan was rejected by the Cypriot parliament but banks have been closed since in a bid to avoid a run on the island's banks.
Mr Clark said the goal was to ensure that payments reached their intended recipients.
Mr Webb said the Government will continue to monitor the situation closely and aims to minimise disruption for those affected.