Basic Bank Accounts: Who Qualifies, What the Payment Accounts Regulations 2015 Require and When a Bank Can Refuse or Close One

A bank account is the base for receiving wages and paying bills, and without one, borrowers often turn to costlier credit. The Payment Accounts Regulations 2015 require the largest banks to offer a basic account to eligible consumers across the UK. This guide summarises those regulations as published on legislation.gov.uk and a HM Treasury publication on basic bank accounts. It is general information, not financial or legal advice.

Which banks must offer one

HM Treasury says that under the 2015 Regulations it has designated the nine largest personal current account providers in the UK to offer basic bank accounts to customers who are legally resident in the UK and either have no bank account or are not eligible for a standard current account. The nine are Barclays UK, The Co-operative Bank, HSBC UK, Lloyds Banking Group (including Halifax and Bank of Scotland), Nationwide Building Society, NatWest Group (including RBS and Ulster Bank), Santander UK, TSB and Virgin Money UK. Regulation 22 requires a designated institution to offer the account to any applicant who meets the eligibility criteria.

Who is eligible

Under regulation 23, a consumer must be legally resident in the UK and must either hold no UK payment account with the basic features listed in the Regulations, or be ineligible for all of the bank’s standard payment accounts. Legally resident consumers include those with no fixed address, asylum seekers and some people without a residence permit whose expulsion is impossible. The bank must verify whether the person already has an account, unless it chooses to rely on the person’s declaration.

What the account must offer

Regulation 19 says the account is sterling-denominated and lets the consumer open, operate and close it, pay in cash at counters, withdraw cash in sterling in the UK, and make direct debits, card payments (including online) and credit transfers, with an unlimited number of operations. Access cannot be made conditional on buying additional services or shares.

Regulation 19(5) prohibits an overdraft facility and requires the bank to take all reasonable steps to prevent overrunning. HM Treasury adds that these accounts must be fee-free for standard operations in sterling but otherwise offer the same core services as a standard current account. Regulation 20 says no fee may be charged if an authorised payment fails for insufficient funds, and no fee or interest on any overrun.

How quickly the bank must decide

Regulation 24 says the bank must open or refuse to open the account without undue delay and no later than 10 business days from receipt of the completed application.

When an application can or must be refused

Regulation 25 says a bank must refuse where opening the account would be unlawful, including where it would be contrary to the Fraud Act 2006, the Money Laundering Regulations 2017, section 40(2) of the Immigration Act 2014, or a restriction from the FCA on taking new customers. A bank may also refuse where the person’s conduct toward staff amounts to an offence such as harassment or a public order offence.

When it refuses, the bank must promptly tell the consumer in writing and free of charge the reason, if it may lawfully do so. Since 28 April 2026 the regulations say the reason must be sufficiently detailed and specific to allow the consumer to understand why, unless giving it would be unlawful, and the bank must explain how to complain to it and the right to complain to the Financial Ombudsman Service. The complaint process is described in this site’s guide to the Financial Ombudsman Service.

When an account can be closed

Under regulation 26, a bank may close a basic account only if at least one listed condition is met. They include knowingly using the account for illegal purposes, no transaction for more than 24 consecutive months, incorrect information given at application that would have led to refusal, the person no longer being legally resident in the UK, the person having another qualifying UK payment account opened later, and certain offences against staff.

Where closure is on the grounds of inactivity, loss of residence or another account, the bank must give the grounds and justification in writing and free of charge. The notice period is at least two months for contracts entered into before 28 April 2026, and at least 90 days for contracts entered into on or after that date. HM Treasury explains that the June 2025 amendment also requires a sufficiently detailed reason for closing a basic account.

FAQs

Can a basic account have an overdraft?

No. Regulation 19(5) prohibits an overdraft facility and requires reasonable steps to prevent overrunning.

How long does a bank have to decide?

Regulation 24 says without undue delay and no later than 10 business days from receipt of the completed application.

Must a bank say why it refused?

It must promptly tell the consumer in writing, free of charge, if it may lawfully do so, and since 28 April 2026 the reason must be sufficiently detailed and specific.

What notice must a bank give before closing a basic account?

For contracts entered into on or after 28 April 2026, at least 90 days where closure is on the grounds of inactivity, loss of residence or another account; for earlier contracts, at least two months.

The bottom line

The nine largest UK personal current account providers must offer a basic bank account to eligible, legally resident consumers, with no overdraft and no standard fees in sterling. Banks must decide within 10 business days, give specific written reasons for a refusal, and can close an account only on the grounds the Regulations list, with 90 days’ notice for contracts entered into from 28 April 2026 in the cases the Regulations name. The Financial Ombudsman Service is the route for complaints.