When ‘Low Value’ Is the Reason: Contesting a Profitability-Led Current Account Closure

A current account with a modest balance, no overdraft and little borrowing can be entirely sensible for the customer and still look unattractive to the bank. In 2026, UK banks continue to review the economics of personal current accounts, and some customers are told that their relationship is no longer viable. The phrase sounds conclusive. It is not necessarily the end of the matter.

A commercial decision to exit a customer relationship is not, by itself, unlawful. Banks are entitled to set their appetite for risk and return, subject to their contracts and regulatory obligations. But a profitability-led closure still has to be handled through a fair process, with proper notice, a clear explanation and regard for the customer’s circumstances. That is where a challenge can begin.

What ‘unprofitable’ can mean in practice

A personal current account is not free to operate. Banks bear costs for payments, fraud controls, statements, call-centre support and regulatory compliance. They earn revenue from sources such as overdraft interest, account fees, card interchange and the use of credit balances. A customer who keeps a low balance, never borrows and rarely incurs charges may be loss-making on a stand-alone basis.

That does not make the customer a bad customer. It makes the relationship commercially thin. The important question is what the bank actually decided. Was the closure based on a product-level review, a relationship-level calculation, a branch or segment strategy, or something else? A letter that says only ‘commercial reasons’ or ‘not viable’ is not a full explanation. Customers can reasonably ask for the decision to be put in writing and for the principal reason to be identified.

Notice periods and FCA expectations in 2026

Most personal current accounts are payment accounts governed by contractual terms and the Payment Services Regulations 2017. Those terms commonly provide for at least two months’ notice of termination. Some basic bank accounts and other products carry different commitments. The first check is therefore documentary: what does your account agreement say, and did the bank follow it?

Notice is not the only issue. The FCA has repeatedly made clear that firms should give customers reasonable notice, explain clearly why an account is being closed, and avoid leaving people stranded without access to banking. The Consumer Duty, in force since 2023, adds a broader obligation to act in good faith, avoid foreseeable harm and support customers in pursuing their financial objectives. A bank does not have to keep every customer forever, but it should be able to show that its process was fair.

One common confusion is the fair value assessment. Under the Consumer Duty, firms assess whether products and services offer fair value. That is a product-level exercise, not a customer-by-customer profitability test. A bank cannot simply point to a fair value assessment as the reason for closing an individual account. Nor should a fair value assessment be used as a substitute for explaining a closure decision.

Commercial exit versus risk exit

Banks close accounts for different reasons, and the language matters. A risk-based closure may follow fraud or financial crime concerns, sometimes without a detailed explanation because of legal restrictions. A commercial closure should be described as such. If a bank initially says the decision is commercial and later refers to ‘risk appetite’ or ‘ongoing review’, customers are entitled to ask which reason is operative.

This distinction matters because the routes for challenge differ. With a commercial closure, the focus is on contract terms, notice, explanation, fair treatment and whether the bank considered alternatives. With a risk closure, the customer may need to address the underlying marker or concern, which is a separate exercise. A vague letter that blurs the two can itself be a complaint point.

Grounds for pushing back

A customer cannot usually compel a bank to maintain a current account indefinitely. The Financial Ombudsman Service (FOS) will not simply substitute its commercial judgment for the bank’s. But it can consider whether the bank followed its terms, communicated properly and treated the customer fairly. Potential grounds for challenge include:

• notice that is shorter than the contract allows, or notice that was not clearly given;
• a reason that is too vague to allow the customer to understand the decision;
• inconsistent explanations, or a late shift from commercial rationale to risk language;
• a failure to consider vulnerability, accessibility needs or the practical impact of losing banking facilities;
• a process that appears not to have engaged with the Consumer Duty, particularly around foreseeable harm;
• discriminatory treatment, or a decision influenced by assumptions about age, disability, residence or another protected characteristic.

A low balance is not a protected characteristic. The challenge is not that the bank must subsidise an unprofitable account. It is that the bank must apply its own rules and regulatory obligations consistently and transparently.

Practical steps for the customer

Start with a written request for the closure rationale. Ask the bank to confirm whether the decision is commercial, whether any risk or fraud concern is involved, and what notice period it considers applicable. Keep the letter and envelope, or save the secure message. If you need the bank’s records, make a subject access request; this can reveal internal notes, though some material may be withheld for legal reasons.

Next, check your statements and account terms. Identify whether you were charged fees, whether you used an overdraft, and whether the bank had recently changed the product. Then complain through the bank’s formal complaints procedure. Be specific about the remedy you want: a clearer explanation, more time to move direct debits and salary, correction of any inaccurate records, or compensation for distress and inconvenience if the process was mishandled.

In the meantime, protect your income and payments. Open an alternative account, ideally before the closure date, and redirect salary, benefits and direct debits. A basic bank account may be available if you cannot access a standard current account. Keep a record of any costs caused by the closure, such as missed payments or lost interest.

If the bank does not resolve the complaint, you can take it to FOS after eight weeks or once you have a final response. FOS can require the bank to put things right and may award compensation, but it will not generally force a bank to keep a customer. The FCA does not adjudicate individual complaints, though complaints data can inform its wider supervision.

The bottom line

‘Unprofitable’ is an internal commercial label, not a legal immunity. A bank may decide that a low-balance, low-borrowing current account no longer fits its model, but it should say so clearly, give the notice its terms require and treat the customer fairly during the exit. Customers who receive a profitability-led closure letter should ask for the reason, test the process and use the complaints route if the explanation or handling does not add up.