Lloyds Bank, HSBC and NatWest issue major customer rule update

Joe Sledge
Sun, 26 Apr 2026 11:15:58 +0000

Major high street banks including Lloyds, HSBC and NatWest will be required to follow new de‑banking regulations from 28 April, giving customers greater protection when accounts are closed.

The rules mean banks and payment service providers must provide at least 90 days’ notice before shutting down an account or ending a payment service, up from the previous two‑month requirement.

The changes apply to new contracts agreed from April 28 onwards and also cover the closure of basic personal bank accounts.

Labour first announced the measures in April 2025 as part of efforts to prevent customers being left without access to banking services at short notice.

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De‑banking refers to the practice of banks closing accounts or refusing to open them for certain customers, typically due to regulatory requirements, risk management considerations or profitability concerns.

The practice can affect both individuals and businesses, particularly where customers do not have alternative accounts in place.

The issue gained national attention in 2023 after Coutts, part of NatWest Group, closed Nigel Farage’s accounts — a high‑profile case later found to involve assessments of his political views rather than the commercial criteria initially cited.

Banks say closures are sometimes necessary to manage risks such as money laundering, terrorism financing and reputational damage, but concerns have been raised about cases where accounts have been shut without a clear explanation.

Under the new regulations, banks must provide customers with a written reason when closing an account.

This will allow customers to challenge decisions they believe are unfair, including escalating complaints to the Financial Ombudsman Service.

Labour said the changes are intended to give customers more time to dispute closures and arrange alternative banking.

Small businesses are expected to benefit after raising concerns about accounts being closed with little notice.

When the policy was announced, economic secretary to the Treasury Emma Reynolds said: “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.”

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There are exceptions where banks must act quickly to comply with financial crime legislation.

The new regulations build on existing protections already in place across the sector.

Banks are prohibited from discriminating against customers based on political views or beliefs when providing payment accounts.

The Treasury has also confirmed the nine largest personal current account providers must offer basic bank accounts to UK residents who do not already have one or are not eligible for a standard account.