Banks will have to give 90 days’ notice to close business bank accounts

Banks will have to give 90 days’ notice to close business bank accounts

Legislation is now in force to protect millions of small business owners from having their bank account closed without notice or adequate reason, following the introduction of new rules which protect consumers. The legislation has been introduced to curb the debanking that many business owners have complained about.

The rules will apply to contracts agreed from and including 28 April 2026, which is when the legislation comes into force.  

Banks and other payment service providers will then be required to give customers at least 90 days’ notice before closing their account or terminating a payment service – an increase from the two months currently required.   

Banks will also need to provide a clear explanation to customers in writing as to why they are closing a bank account, so people can challenge decisions, such as through the Financial Ombudsman Service. 

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.

The measures will be subject to certain exceptions, for example, to enable payment service providers to comply with their obligations under financial crime law and prevent money laundering.