Government proposes new debanking rules

Expected to come into force for "relevant new contracts" from April 2026, banks will also be required to provide a clear explanation to customers in writing as to why the account is being closed.

The new rules will give customers more time to challenge decisions they disagree with and find a new bank if their account is closed. Additionally, it will support small businesses which have complained about their account being closed without reason at short notice.

Economic secretary to the Treasury Emma Reynolds said: "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.

"Under the new rules, customers will receive more notice of account closures, be entitled to an explanation as to why their account has been closed and have more opportunity to challenge such decisions."