A new bank account rule comes into effect across several of the UK's largest financial institutions from Monday, 28 April. Major banks including Lloyds, HSBC, NatWest and Nationwide must now provide customers with at least 90 days' notice before closing their accounts, an increase from the previous two-month requirement.
Background of the Rule Change
The regulations, announced by the Labour Party government in 2025, also mandate that banks provide written explanations for account closures. This enables customers to challenge decisions through channels such as the Financial Ombudsman Service.
The changes are designed to protect individuals and small businesses from the sudden loss of banking access. However, urgent action is still permitted in cases involving financial crime compliance.
Government Statement
Labour Party 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.”
She added: “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.”
Key Details
- Banks and other payment service providers must give at least 90 days' notice before closing an account or terminating a payment service.
- Customers will receive a clear written explanation for the closure.
- Decisions can be challenged through the Financial Ombudsman Service.
- Urgent closures remain possible in cases of financial crime compliance.
These measures aim to enhance financial security for consumers and businesses, ensuring fair treatment and adequate time to respond to account closures.
