Bank Closed Your Account? The New 90-Day Rules Explained

If your bank closed your account, or has written to say it will, the legal position changed on 28 April 2026. New rules give customers longer notice and a proper explanation, but only in some cases, and the exceptions are wider than most people expect.

This guide explains what the rules require, which accounts they cover, when a bank can still close an account straight away, and what to do once a closure notice arrives. It is written for individuals and business owners who bank in the UK.

What changed on 28 April 2026

The Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025 (SI 2025/688) came into force on 28 April 2026. They replaced regulation 51 of the Payment Services Regulations 2017 and inserted new regulations 51A to 51D. Where a payment services contract (which includes a current account) runs for an indefinite period and was entered into on or after that date, the provider must now:

• give a written notice of termination at least 90 days before the closure takes effect, rather than the previous two months;
• explain the reasons in terms that are “sufficiently detailed and specific” for the customer to understand why the contract is ending; and
• tell the customer how to complain to the provider and whether they have a right to complain to the Financial Ombudsman Service.

Equivalent changes were made for basic bank accounts under the Payment Accounts Regulations 2015. HM Treasury said the aim was to give people and small businesses more time to challenge a decision and find another bank (HM Treasury announcement).

The catch: it depends on when your account was opened

The 90-day rule is not retrospective. It applies to contracts entered into on or after 28 April 2026.

Many long-standing customers therefore remain on the older two-month rule. Whether a recently changed or replaced agreement counts as a new contract is a question of fact, so it is worth checking the date on your account terms before assuming either position.

The rules are also about closures, not a general right to be accepted as a customer. The exception is the basic bank account: a refusal of an application must now come with a specific reason and details of how to complain, as amended regulation 25 of the Payment Accounts Regulations 2015 provides. Separate, existing protections prevent a bank discriminating against a UK consumer because of their political opinions or beliefs.

When a bank can close without 90 days’ notice

The regulations contain exceptions, and they matter in practice. Under regulation 51C, a provider does not have to give a termination notice at all where, for example:

• it cannot complete the customer due diligence that the money laundering regulations require;
• the account must be closed under immigration legislation;
• it has reasonable grounds to suspect that a payment service has been, is being or will be used in connection with a serious crime;
• the FCA, the Treasury or the Secretary of State requires the contract to be terminated; or
• it reasonably believes the customer has engaged in conduct involving, or likely to involve, an offence in providing goods or services to a third party, and the account was used in connection with it.

Regulation 51D allows shorter notice (a notice given “without delay” instead of 90 days) where the customer’s conduct towards the bank’s staff amounts to certain public order or harassment offences, or where incorrect information given at account opening would have stopped the bank entering the contract. And under regulation 51B(4), if the new requirements conflict with another legal duty the bank has, the other duty prevails.

In practice, closures that rest on financial crime concerns often come with little or no explanation. The courts have long accepted that a bank which genuinely suspects money laundering may delay a customer’s payment instructions and decline to say why, while requiring the bank to prove it actually held the suspicion. See Shah v HSBC Private Bank (UK) Ltd [2010] EWCA Civ 31 and, after trial, [2012] EWHC 1283 (QB), decided under Part 7 of the Proceeds of Crime Act 2002. Our guide to how POCA affects business owners and directorsexplains how those powers reach ordinary accounts.

It is also worth separating two different events. A bank deciding to close an account is a private decision under the account contract. A court-ordered freeze is a different process, with its own routes to challenge. If your funds are frozen rather than your account closed, see our guides to Account Freezing Orders in 2026 and how to challenge an HMRC account freezing order.

What the explanation should look like

“Sufficiently detailed and specific” is the statutory test, and it is a higher standard than a stock phrase. A general reference to commercial judgement or “risk appetite” is difficult to reconcile with it. Where the bank relies on the shorter-notice route in regulation 51D, it must still send the written notice with reasons without delay. Where it relies on regulation 51C, no notice is required, which is why the particular exception the bank is relying on is often the most important fact in a closure dispute.

What to do once the closure notice arrives

1. Keep the notice and fix the dates. Work out when your account contract began. That decides whether you have 90 days or two months.
2. Start moving banking early. Direct debits, payroll, card payments and customer payments take time to redirect. Do not wait until the last week.
3. Complain in writing. Use the bank’s complaints procedure first. If you are not satisfied, eligible consumers, small businesses and charities can usually go to the Financial Ombudsman Service, generally within six months of the bank’s final response.
4. Ask for your information. A data subject access request can show what the bank holds about you, although a bank may withhold material where disclosure would prejudice a financial crime investigation.
5. Record the impact. Lost contracts, failed payments and extra costs should be documented as they happen. If notice rules were not followed, any claim will turn on the contract, the regulations and the loss, and it should follow the pre-action protocols and the relevant limitation periods.
6. Check for a second problem. If the account is a company account and the bank has restricted it after a winding-up petition, that is a separate issue. A validation order may allow the company to keep trading while the petition is pending, and our page on winding-up petitions explains the wider process.

Can a court make the bank keep the account open?

Rarely. Courts are generally reluctant to compel a bank to continue a relationship it wants to end. The realistic remedies tend to be a complaint, the Ombudsman, compensation for loss caused by a breach, and, in urgent cases, targeted applications about specific frozen funds or payments (see our overview of injunctive relief). Many disputes with banks are resolved by negotiation once the bank recognises that its notice, its reasons and its process will be examined, and alternative dispute resolution can be a sensible way to get there.

Getting the closure papers read properly

Closure disputes tend to turn on small facts: the date the contract began, the exact wording of the notice, and which exception the bank is relying on. A review of the notice, the account terms and the correspondence by a solicitor and a barrister together, before you reply to the bank or move any funds, usually shows which of those points matter. That is particularly worth doing where the closure follows a payment dispute, a freeze or a wider bank litigation or business dispute.