A banking blackout for charities? Why a collective voice is important

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Nationally it appears that tighter banking restrictions coupled with a sustained period of financial inactivity due to the pandemic has led to a change in banking practice in relation to charity banking services provided to VCSE groups and organisations. 

The concerns about constraints on free banking services from the big banks are two-fold.


  • Firstly, many small charities have been locked out of their accounts or found themselves unable to open one. Concerns have been raised by charitable groups and membership bodies that smaller organisations that have been inactive during lockdown but have returned to fundraising activity have found their accounts closed or frozen.
  • Secondly, others have reported being unable to apply for new accounts due to almost none of the big banking services providers accepting fresh applications.  

Consequently, some organisations have been unable to pay in grant money, or individuals have been using their own personal bank accounts to accept donations. 

In one case that we at CAN know of, a village hall with a decades-long account at a major bank has been informed that free banking services are no longer available. The decision appears to be based upon eligibility criteria that excludes charities and Community Interest Organisations (CIOs) with more than three trustees or more than three signatories. This could potentially apply to many VCSE groups across Norfolk as well as nationally.

What’s being done?

The Small Charities Coalition has recently met with UK Finance (the collective body for the banking and finance industry), the fundraising regulator and the Charity Commission, along with the Institute of Fundraising and the National Council of Voluntary Organisations (NVCO), with the aim of resolving the problem.

The Charity Commission is sympathetic to organisations who find themselves in this situation and encourages people to contact them if they are having problems.

UK Finance offers impartial advice in a helpful video here

And some useful advice about how to go about opening a charity banking account can be found here.

If a charity believes it has been treated unfairly by its bank, it should make a complaint to the bank in the first instance. But if the charity isn’t happy with the response it can bring a complaint to the Financial Ombudsman Service.

Community Action Norfolk as a ‘voice’ for the VCSE community

‘Voice’ is important. You can’t see it, it may not be tangible in a physical sense, but collective representation is how positive change is brought about. CAN supports change at governmental level through the national ACRE (Action with Communities in Rural England) network and other national partners and contributes strategic voice for the VCSE community at local and regional level with local authorities and funders, raising awareness and ensuring that potential issues are highlighted for the sector.

There are of course a wide range of constitutional and governance matters that you may have concerns about. As always, our Community Development Officers are here to offer advice and guidance on constitutional and governance matters. Contact us on 01362 698216 or office@communityactionnorfolk.org.uk

Update: November 2023

This problem has recently escalated with many groups being told that they have the wrong structure for their high-street banking account, which has then been closed, leaving them unable to operate or pay staff and contractors.  We, and our counterparts across the country, have shared our knowledge of local cases with ACRE who have been part of the national response to this problem.  After many conversations with many infrastructure bodies, the Charity Commission has issued an open letter to UK Banks, calling for them to address this problem.  We will keep this page updated as we hear more on this issue.

Update December 2023 

ACRE are working with NCVO and WCVA over submission of a shortened version of this letter as a 'letter to the Editor' follow up to The Guardian's recent article (4th Dec.) on Barclays' behaviour towards charity customers.

Click here for the consultation log entry on the Financial Conduct Authority's consultation over access to cash.  It is worth noting that the consultation picks up on several issues important to local communities beyond just ATM based access to cash.  Response deadline is February 2024.

Update April 2024

Since 2022, the Civil Society Group and partners have been working to improve bank account services for charities and voluntary organisations across the UK. They are asking you to complete this survey to help them understand the challenges the sector is facing so that they can advocate on your behalf to the respective charity regulators, government, and the banking sector. 

Update on the Charity Commission annual sector Survey

On Thursday 7th March 2024, the Charity Commission shared early findings from its annual sector survey, revealing that 42% of trustees surveyed said their charity experienced poor service from their banks in the last 12 months.
6% of respondents confirmed that they had experienced account freezes or being blocked out over the past year and 7% of respondents reported that their bank had lost their records. New data suggests nearly half of charities experience issues when banking. Read more here.