Millions of people and businesses protected against debanking
Source: gov.uk (2025-04-28)

Protections will support small businesses to grow, putting more money into people’s pockets through the Plan for Change.

New rules will require banks to give customers 90 days’ notice before closing accounts and provide a clear explanation.

Changes will prevent banks closing accounts without a clear reason, while giving people and businesses the time and information needed to challenge decisions.

Millions of people and small business owners will be better protected against their bank account being closed, as the government goes further and faster to drive growth and delivers security for working people through the Plan for Change.

Banks and other payment service providers will be required to give customers at least 90 days’ notice before closing their account or terminating a payment service – an increase from the two months currently required – under new rules expected to come into force for relevant new contracts from April 2026.

Banks will also need to provide a clear explanation to customers in writing, so people can challenge decisions, such as through the Financial Ombudsman Service.

The new rules will give customers more time to challenge decisions they disagree with and find a new bank if their account is closed. This will support small businesses which have complained about their account being closed without reason at short notice – leaving them no time to complain or find a replacement bank.

Economic Secretary to the Treasury, Emma Reynolds, said:

Delivering economic security for working people is at the heart of our Plan for Change and strengthening protections against debanking will protect people’s and businesses’ access to banking services.

Under the new rules, customers will receive more notice of account closures, be entitled to an explanation as to why their account has been closed and have more opportunity to challenge such decisions.

The nine largest personal current account providers in the UK are already legally required to offer basic personal bank accounts to people who legally reside in the UK who do not have or are not eligible for an account. The new rules will help to ensure continued access to basic banking services for the most vulnerable.

The legislation will support existing protections, including those which prohibit a bank from discriminating against a UK consumer based on political opinions or beliefs when accessing a payment account.

By ensuring a more predictable access to banking and other payment services, the government is reinforcing its commitment to the millions of individuals and businesses across the UK who rely on these vital services.

More information

The new legislation being brought forward subject to Parliamentary approval would apply to all payment service providers who decide to terminate payment service contracts without a definite expiry date, including bank account closures. They will apply to contracts agreed from and including 28th April 2026, when the legislation is expected to come into force.

The measures will be subject to certain exceptions, for example, to enable payment service providers to comply with their obligations under financial crime law.

The new rules will also apply to the termination of basic personal bank accounts from and including 28th April 2026.