UK HM Treasury has announced draft legislation to strengthen protections against bank account closures by requiring banks and other payment service providers to give customers at least 90 days’ notice and a clear written explanation before closing an account or terminating a payment service contract. The proposed notice period would increase the current requirement from two months to 90 days, giving individuals and small businesses more time to challenge closures, including through the Financial Ombudsman Service, and to secure alternative banking arrangements. The rules would apply to payment service providers terminating payment service contracts without a definite expiry date, including closures of basic personal bank accounts, subject to specified exceptions such as where needed to comply with financial crime law. The legislation is subject to Parliamentary approval and is expected to come into force on 28 April 2026, applying to contracts agreed from and including that date.
HM Treasury 2025-04-28
UK HM Treasury proposes 90-day notice and written reasons before payment service providers close accounts
UK HM Treasury proposes draft legislation to enhance protections against bank account closures, requiring banks and payment service providers to give at least 90 days' notice and a clear explanation before closing an account. This extends the current notice period from two months, allowing more time for individuals and small businesses to challenge closures and secure alternatives. Pending Parliamentary approval, the legislation is set to take effect on 28 April 2026.