De-banking, according to industry definitions, refers to the practice of banks closing or refusing to open accounts for certain customers, often due to regulatory requirements, risk management or profitability concerns. The issue gained national attention after the 2023 closure of Nigel Farage’s accounts by Coutts, part of NatWest Group, as widely reported. An investigation later found that the closure involved assessments of his political views rather than the commercial criteria initially cited. This sparked widespread criticism and calls for stricter rules, including the minimum 90-day notice period now being implemented.
Banks maintain that account closures are sometimes necessary to manage risks such as money laundering, terrorism financing and reputational damage. However, campaigners have raised concerns about instances where accounts have been shut without adequate explanation.
Under the new regulations, which extend the closure notice period from two months to 90 days, customers can challenge decisions through the Financial Ombudsman Service. Labour stated that the changes are designed to give customers more time to dispute closures and secure alternative banking arrangements. The regulations also state that the changes cover the closure of basic personal bank accounts.
The regulations state that the changes apply to new contracts agreed from 28 April 2025 onwards. Labour first announced the measures in April 2025. While major high street lenders are covered, it remains unclear which other financial institutions will be bound by the rules.