From April 2026, banks and payment service providers will face stricter rules around how and when they can close customer accounts, under new legislation aimed at improving transparency and giving people and small businesses more time to respond to account closures.
The changes mean that:
· Customers must be given at least 90 days’ notice before their account is closed or a payment service is terminated - up from the current 60 days.
· A written explanation must be provided, outlining why the account is being closed. This is intended to help customers challenge the decision, including through the Financial Ombudsman Service if necessary.
These new protections are expected to apply to contracts agreed from 28 April 2026, and are part of a wider government plan to give people and businesses more certainty and security when it comes to accessing banking services.
Why It Matters for Businesses
Small business owners in particular have raised concerns in recent years about accounts being shut down with little or no warning, often without a clear explanation. Clearly this is very disruptive and has left businesses with no time to complain or find a replacement bank.
The new rules should help to improve matters. There will however still be some exceptions - for example, where account closure is necessary for financial crime prevention.
Therefore, it’s worth being aware of these upcoming changes. While they don’t come into force until 2026, they could influence how banks handle account management going forward.
See: https://www.gov.uk/government/news/millions-of-people-and-businesses-protected-against-debanking
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