The Government has announced new rules to clamp down on potential debanking following the controversy between NatWest-owned Coutts Bank and Nigel Farage in 2023.
Debanking complaints soared in the wake of the fiasco, which saw Brexit campaigner Nigel Farage ditched by Coutts – part of the NatWest Group – for reportedly not being wealthy enough. Farage maintained the account closure was due to his political views and said he’d been rejected by other banks too.
Debanking refers to the act of a bank closing or refusing to open accounts for certain customers. This can occur due to a variety of reasons, including regulatory concerns, risk management, or potential reputational harm to the bank.
Ministers said the new legislation will protect millions of people and businesses against debanking.
The changes will prevent banks closing accounts without a clear reason, while giving people and businesses the time and information needed to challenge decisions.
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Under new rules expected to come into force from April 2026, banks and other payment service providers will be required to give customers at least 90 days’ notice before closing their account or terminating a payment service. This is an increase from the two months currently required.
Banks will also need to provide a clear explanation to customers in writing, so people can challenge decisions, such as through the Financial Ombudsman Service (FOS).
This will support consumers and small businesses who have complained about their account being closed without reason at short notice – leaving them no time to complain or find a replacement bank.
Emma Reynolds, Economic Secretary to the Treasury, 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.”
The nine largest personal current account providers in the UK are already legally required to offer basic personal bank accounts to people who legally reside in the UK who do not have or are not eligible for an account.
Ministers said the new legislation will support existing protections, including those that prohibit a bank from discriminating against a UK consumer based on political opinions or beliefs when accessing a payment account.
