Britain's largest banks are set to implement new regulations designed to protect customers from arbitrary account closures. Under the Labour government's 'de-banking' rules, individual savers and small business owners will receive at least 90 days' notice before their account is closed or a payment service is terminated. This is an extension from the previous two-month requirement.
New Rules Take Effect
The regulations apply to all new contracts starting Tuesday and will impact major financial institutions including Nationwide, NatWest, Lloyds and HSBC. Banks must also provide a clear written explanation for any account closure, giving customers greater ability to challenge decisions through the Financial Ombudsman Service.
Government's Stance
Economic Secretary to the Treasury Emma Reynolds stated: "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 that customers will receive more notice, be entitled to an explanation, and have more opportunity to challenge such decisions.
The new rules aim to give customers time to contest decisions they disagree with and to find alternative banking arrangements if necessary. Currently, the UK's nine largest personal account providers are already required to offer basic bank accounts to legal residents who lack or are ineligible for an account.
Background on De-Banking
The issue gained prominence in 2023 when Nigel Farage's private bank account was closed by Coutts, a NatWest-owned bank. Documents revealed that his views were considered "at odds with our position as an inclusive organisation." Former NatWest CEO Alison Rose resigned after admitting to being the source of an inaccurate story about Farage's finances, and the parties settled out of court in 2025.
The government says these changes complement existing protections, including rules that prohibit banks from discriminating based on political opinions or beliefs when providing payment accounts.
