Banks will have to give 90 days’ notice before closing accounts, giving customers more time to respond.

From April 2026, new government rules will strengthen protections for individuals and small businesses at risk of unfair bank account closures. Under the legislation, banks and payment service providers will be required to give at least 90 days’ written notice before closing an account or terminating a payment service, commonly known as debanking. A significant increase from the previous 2-month limit.

Banks will also be required to provide a clear explanation for the closure, allowing customers to challenge the decision including through the Financial Ombudsman Service. These changes are designed to protect customers, particularly small businesses, who have often found their accounts shut down without notice or reason, leaving them unable to operate or seek alternatives.

The new rules form part of the government’s wider Plan for Change, aimed at delivering economic security and supporting growth. The rules will come into force for relevant new contracts agreed from 28 April 2026 onwards and also apply to the termination of basic personal bank accounts.

There are exceptions in cases where closure is necessary to comply with financial crime laws. Existing protections which prohibit a bank from discriminating against a UK consumer based on political opinions or beliefs remain in place.