The government is introducing stronger protections to safeguard millions of individuals and businesses from having their bank accounts closed without clear reasons — a key step under its
Plan for Change to drive growth and improve economic security.
Under the new regulations, banks and payment service providers must give customers at least 90 days’ notice before closing an account or terminating a payment service, up from the current 60 days. These changes are expected to apply to new contracts starting April 2026.
Crucially, banks will also be required to provide customers with a clear, written explanation when closing an account. This ensures that individuals and businesses have the information needed to challenge decisions, including through the Financial Ombudsman Service.
The move particularly supports small businesses, which have often raised concerns about accounts being closed without warning or justification, leaving them without enough time to seek alternatives or raise complaints.
Economic Secretary to the Treasury, Emma Reynolds, commented:
"Delivering economic security for working people is at the heart of our Plan for Change. Strengthening protections against debanking will safeguard people’s and businesses’ access to vital banking services."
The new rules will give customers:
- More notice before account closures,
- The right to a clear explanation,
- Greater opportunity to contest unfair closures.
Additionally, the UK's nine largest personal current account providers are already legally required to offer basic bank accounts to UK residents who otherwise cannot access banking services. The latest reforms will further ensure continued access, especially for the most vulnerable.
These protections build on existing laws, which already ban banks from discriminating against consumers based on political views or beliefs when offering payment accounts.
By making access to banking and payment services more predictable, the government is reaffirming its commitment to support the millions of individuals and businesses that depend on these essential financial services. Photo by Carlos Delgado; CC-BY-SA, Wikimedia commons.