Charities: Banking Services

Lord Forbes of Newcastle Excerpts

Thursday 23rd July 2026 Lords Chamber

Asked by

[Lord Forbes of Newcastle]

To ask His Majesty’s Government what assessment they have made of the challenges faced by charities in accessing ethical and appropriate banking services; and what steps they are taking to ensure that voluntary organisations can obtain reliable, affordable and compliant banking provision.

[The Parliamentary Under-Secretary of State, Ministry of Justice (Lord Lemos) (Lab)]

Charities make vital contributions across the country. While the provision of banking services is ultimately a commercial decision for banks, the Government believe that it is essential that charities and voluntary organisations can access suitable banking services for their needs. The Government have worked closely with UK Finance to support non-profit groups’ access to finance, developing the interactive account finder tool hosted on its website. Smaller charities may also be eligible to use the current account switch service. I should also declare my interest: I was chair of the payments board at UK Finance for several years.

[Lord Forbes of Newcastle (Lab)]

My Lords, I thank my noble friend for his thoughtful and considered reply. Many charities face slow, complicated and burdensome processes to change registered trustees on their accounts. According to the Charity Commission, a growing number of charities, particularly but not exclusively those that are Muslim-led, are finding themselves debanked altogether. Does my noble friend the Minister accept that current money laundering rules and banks’ risk-avoidance practices are having unintended consequences for charities seeking ethical banking? Will His Majesty’s Government consider issuing clearer regulatory guidance for the banking sector to ensure that civil society organisations are treated proportionately, fairly and indiscriminately?

[Lord Lemos (Lab)]

I thank my noble friend for that easy, holiday-focused question on the last day of term. I also thank my noble friend Lord Pitt-Watson, who got to the Treasury job too late to take this Question. Mine’s a gin and tonic, David.

We recognise the concerns raised by charities about access to banking services. The UK’s anti-money laundering regime is designed to be risk-based and proportionate, and banks are expected to assess customers on that basis, rather than applying blanket approaches. We continue to engage with the banking sector, regulators and charities to understand these issues, and we will keep under review whether further guidance is needed to support fair and proportionate treatment of civil society organisations.

Just to share my empathy with my noble friend, the Charity Finance Group’s 2024 survey said that 92% of charities had experienced at least one banking difficulty in the previous two years. That number needs to come down.