Several thousand expat Britons with Cypriot bank accounts will have their pension payments frozen until "at least" Tuesday to ensure they receive them ahead of a proposed bank deposit tax, Treasury minister Greg Clark has said. He told MPs the Government was putting pension payments on hold to "ensure that any payments made by Her Majesty's Government to banks in Cyprus get to the intended recipient". He also confirmed earlier announcements that more than 3,000 British service personnel based in Cyprus would be compensated by the Government if the levy goes ahead to ensure they would not suffer "unreasonable losses". Cypriot government postponed a vote on the unprecedented one-off bank deposit tax, part of a wider bailout package. The island's banks will remain closed until Thursday, as Monday's bank holiday has been extended by two days, the nation's central bank said. The Cypriot government wants time to amend the deal reached over the weekend, which will raid ordinary people's savings to partly fund a bailout package. Unlike the previous rescues for Greece, Portugal, Ireland, and Spanish banks, the proposed Cypriot bailout is the first one that dips into people's bank accounts to finance a bailout. In exchange for 10 billion euro (£8.6 billion) in rescue money, the government proposed a one-time tax of 6.75% on all bank deposits under 100,000 euro (£86,490) and 9.9% over that amount. The bailout package, which has still to be finalised, involves the International Monetary Fund, European Central Bank and European Union. But after prompting an outcry from depositors, the Cypriot government is now looking at changing the terms of the deal so small savers lose less, while big depositors pay more. One proposal is to make the tax more progressive, with a one-time 3% levy on deposits below 100,000 euro, rising to 15% for those above 500,000 euro (£428,505). Mr Clark reiterated the UK Government's commitment to compensate around 3,000 armed forces members stationed in Cyprus for "reasonable losses" incurred from the situation. And he said several thousand UK pensioners in Cyprus would have their payments temporarily frozen, adding that it is possible to change the designated bank account to receive payments online. "Any UK pensioners in Cyprus can be assured that their future pension payments are being held safely and a normal payment service will resume as soon as the situation in Cyprus becomes clear," he said. "However, recipients of these payments are able of course to switch the bank account to which payments are made with immediate effect." Mr Clark urged anyone wishing to do so to contact the International Pension Centre online. | 
