Charities welcome government plans for new debanking protections

30 Apr 2025 News

By thodonal/ Adobe (generated with AI)

Charity sector bodies have welcomed the government’s announcement of new protections against bank accounts being closed with limited notice or reasons given.

Banks will be required to give customers 90 days’ notice before closing accounts and provide a clear explanation, under new rules announced by the Treasury this week.

The rule change, which will be subject to parliamentary approval, is due to come into force from 28 April next year and will increase mandatory notice periods from two months.

While not explicitly naming charities in its announcement, the Treasury confirmed the new rules would apply to charity bank account holders.

The Treasury said in its announcement that the new rules will give customers more time to challenge decisions they disagree with and find a new bank if their account is closed.

‘Positive development’ for charities

Many charities, particularly those operating overseas, have complained about bank account closures in recent years as well as broader issues with bad service from financial institutions.

Clare Mills, deputy chief executive of the Charity Finance Group (CFG), said: “Many of CFG’s members have long commented that the thought of having their bank accounts closed or frozen has been a source of serious concern.

“There have been countless stories of bank accounts being terminated without any reasonable warning and without clear or good reason. We therefore welcome the government’s plan to bring forward this important legislation. 

“The new rules will strengthen the existing protections for charities, businesses and individuals, and will require banks to set out a clear reason for closing accounts.

“This requirement will also give charities the information they need to challenge those decisions.”

Fadi Itani, CEO of the Muslim Charities Forum, said: “These measures are a long-awaited acknowledgement of the issues charities face, and a positive development in protecting charities from unfair practices.

“However, we need to see stronger safeguards, including a legally binding right to a bank account for charities.”

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