The Treasury has announced that banks will be required to give customers 90 days’ notice, up from two months, before closing accounts under new rules expected to come into force from April 2026. The reforms update the UK Payment Services Regulations, which govern over 1,000 banks and payment processors operating in the UK.
Customers must also receive a clear explanation in writing, allowing them to challenge closures through the Financial Ombudsman Service if necessary.
The changes follow figures from the Financial Conduct Authority (FCA), obtained by The Telegraph, revealing that half a million customers were debanked last year, the highest number in over a decade.
Emma Reynolds, Economic Secretary to the Treasury, said: “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, and have more opportunity to challenge such decisions.”
The Treasury said small businesses would also be better protected, after firms complained about accounts being closed without warning, leaving them no time to secure alternative banking services.
It comes amid growing concerns that banks are misusing their powers. Nigel Farage, now leader of Reform UK, was involved in a high-profile dispute after the private bank Coutts closed his account in 2023 after the NatWest subsidiary’s risk committee determined that his views on Brexit, immigration, and Net Zero “did not align” with its “values”. The scandal led to the resignation of Alison Rose, then chief executive of NatWest. NatWest has since paid Mr Farage an undisclosed sum to settle the dispute, with both parties stating that the matter was “resolved and settled.”
The FSU has documented numerous cases that illustrate the urgency of reform. In Hong Kong, HSBC recently closed the accounts of members of the League of Social Democrats, threatening the future of one of the few remaining pro-democracy parties willing to protest China’s national security law.
In the UK, Barclays Bank was ordered to pay more than £20,000 in compensation to the Christian organisation Core Issues Trust after closing its accounts under pressure from LGBTQ+ groups. Henrik Overgaard Nielsen, a former Brexit Party MEP, was informed that his MetroBank account would be closed. The Reverend Richard Fothergill, a Church of England vicar and FSU member, was also told by the Yorkshire Building Society that his account would be closed after he criticised the bank’s promotion of Pride events and what he described as a morally suspect trans agenda.
FCA figures show that an estimated 408,000 bank accounts were shut down last year, compared to just 45,091 in 2016 to 2017.
But the problem isn’t confined to high street banks. In 2022, PayPal deplatformed alternative media sites Mint Press News and Consortium News, both left-leaning outlets that questioned aspects of the West’s response to Russia’s invasion of Ukraine. Around the same time, PayPal and Etsy suspended the accounts of evolutionary biologist and gender-critical writer Colin Wright for expressing his belief in biological reality.
Even grassroots campaigns have been targeted. PayPal shut down the accounts of UsforThem, a parents’ group that fought to keep schools open during the pandemic, citing concerns about “the nature of its activities.” Ko-Fi, another online platform, removed accounts belonging to feminist organisations critical of gender ideology.
During the Covid lockdowns, PayPal also demonetised groups raising legitimate questions about Covid-19 vaccines, including the UK Medical Freedom Alliance and the legal advice site Law-or-Fiction. In many cases, personal accounts belonging to group leaders, such as Liz Evans of the UKMFA, were closed at the same time.
As journalist Matt Taibbi has pointed out, “going after cash is a big jump from simply deleting speech and actually has a much bigger chilling effect”.
The FSU, which met with Treasury officials and ministers in the last administration to lobby for reform, welcomes the new rules. A statutory instrument to enact the reforms was due to be laid before Parliament last summer, but was delayed by the snap election.
One key issue we raised was the inadequacy of the old notice provisions under the 2017 Payment Services Regulations. Under the previous framework, banks were required to give two months’ notice only if the contract so provided, meaning they could simply write terms that allowed them to close accounts immediately. We highlighted that this loophole gave customers little or no time to appeal a decision, lodge a complaint with the Financial Ombudsman, or secure an alternative service.
Following our representations, the previous Conservative government committed to introducing a clear, unconditional 90-day notice period. It’s encouraging to see that the new Labour administration has now picked up that baton and is pressing ahead with these reforms. Protecting citizens’ access to financial services, irrespective of their political beliefs, is too important to become a party-political issue.
There’s more on this story here.
