The Payment Services and Payment Accounts (Contract Termination) (Amendment) Regulations 2025 take effect on 28 April 2026. UK payment service providers must give customers at least 90 days' written notice before terminating a framework contract for payment services. The previous minimum was two months under the existing Payment Services Regulations 2017. Providers must include a sufficiently detailed and specific explanation of the reasons for termination. The notice must inform customers of their right to challenge the decision through the Financial Ombudsman Service.
The 90-day notice requirement applies only to framework contracts entered into on or after 28 April 2026. Contracts signed before that date remain subject to the prior two-month notice period. The Payment Accounts Regulations 2015 are also amended to require designated credit institutions to give clear reasons when refusing a basic payment account application or terminating an existing account.
Parliament introduced the regulations after a 2023 controversy over debanking practices prompted a government review of account closure decisions across UK financial institutions. The rules align with a broader reform programme set out in the Payments Forward Plan published by HM Treasury on 26 February 2026. That plan includes a consultation on replacement payment services legislation in the second quarter of 2026. Faster Payments and BACS are scheduled for operational enhancements by the end of 2026.