What happens to your account when a bank is taken over or closes a brand

When a bank is bought, merged with another, or closes a brand name, the account you hold usually carries on rather than being shut down. Your money, direct debits and standing orders are typically transferred to the new owner, and in many cases your sort code and account number stay the same for a period. What changes most often are the terms of the account, the app and website you use, and, importantly, how your FSCS protection is counted.

The biggest practical effect of a takeover is usually on deposit protection rather than on day-to-day banking. FSCS protects up to £120,000 per person, per banking licence¹. When two banks that used to have separate licences come under one owner, the £120,000 limit starts applying to the total you hold across both, not to each one separately². That is what happened when Barclays took over Tesco Bank's savings, credit cards and loans in November 2024, and when NatWest acquired Sainsbury's Bank's savings, credit cards and loans in May 2025³.

Recent takeovers: Tesco Bank, Sainsbury's Bank and Virgin Money

Several well-known banking brands have changed hands recently, and each shows a different pattern of what happens next.

In November 2024, Barclays took over Tesco Bank's savings, credit cards and loans. The Tesco Bank brand continues, but the £120,000 FSCS limit is now shared between the two banks³. In May 2025, NatWest acquired Sainsbury's Bank's savings, credit cards and loans, and the £120,000 limit is now shared between the two banks and Ulster Bank, which is also part of the NatWest group³.

Virgin Money customers have experienced a change of a different kind. Virgin Money wrote to customers in November 2025 explaining what the transfer to Nationwide means for them, including the key dates and documents involved⁷. Virgin Money itself was formed from earlier mergers: the Clydesdale and Yorkshire Bank brands are currently being phased out in favour of Virgin Money, and the merger has led to branch closures⁸.

The pattern across all of these is the same in one respect: the brand on the app or the high street may change, but the accounts behind it usually continue under a new owner. What customers need to watch is which banking licence now sits behind each brand, because that determines how their protection is counted.

Your account usually moves across, not closed

When a takeover or brand closure happens, the normal approach is to migrate accounts to the new owner rather than close them. Where there is an arrangement in place between the old and new bank, the old bank must transfer any account balance and make arrangements for direct debits and standing orders⁹. If there are mistakes or delays in the transfer process that lead to bank charges, those charges are not something the customer is expected to pay⁹.

Current accounts are usually handled automatically. Savings accounts are different: they cannot usually be moved automatically, and you may need to speak with your bank to arrange this¹¹. If you hold savings with a brand that is being absorbed into another group, it is worth contacting the bank directly rather than assuming the money will simply appear in a new account.

If you switch using the Current Account Switch Service, payments sent to or from the old account are redirected to the new account for a period afterwards. TSB, for example, states that all payments sent to or from the old account will be redirected to the TSB account for at least 3 years after the switch completes¹². You can still use the old account up to day 6 of the switch, but any new payments set up during the switch will not be transferred¹².

What the new owner can change and how they must tell you

A new owner can change the terms of your account, including fees, interest rates and how the account works, but it must tell you before changes take effect. The letters you receive during a transfer are not just marketing: they set out the new terms, and ignoring them can mean accepting changes by default.

There are rules limiting how abruptly an account can be closed. For basic bank accounts, the bank must give at least two months' notice if it closes the account for breaking the terms, for example because you opened another UK bank account, have not used the account in over two years, have moved abroad, or because of fraudulent use or abuse towards staff⁶. For accounts opened on or after 28 April 2026, the bank should explain why it has closed the account if it can¹³.

If your account details change, organisations that pay you or take payments from you need to know in time. Student Finance England requires 4 working days' notice to change bank details so that a payment is made to the new account¹⁴. If you receive Universal Credit or other benefits, you can ask your new provider to transfer your balance and all your incoming and outgoing payments over, so payments follow the account rather than stopping¹⁵.

FSCS protection: up to £120,000 per person, per banking licence

The Financial Services Compensation Scheme protects deposits up to £120,000 per person, per banking licence¹. The limit rose from £85,000 to £120,000 on 1 December 2025, and the change applies to all banks, building societies and credit unions in the UK⁴. Before 1 December 2025 the limit was £85,000 per individual, per financial institution¹⁶.

Protection is automatic: you do not apply for it or pay for it. The FSCS describes itself as the body that gives you automatic protection up to £120,000 if your bank, building society or credit union fails¹⁷. What matters is which authorised firm holds your money. If a current account and a savings account share one authorisation number, they are classed as a single firm and the £120,000 limit is shared across both¹⁸.

You can check your own position using the FSCS protection checker, which lets you confirm whether your money is protected and how your accounts are grouped¹⁹. The FSCS also publishes lists of the banks, building societies and credit unions it covers²⁰.

A few points about how the limit is counted:

• Per person, per licence: the limit applies to the total you hold with one authorised firm, across all accounts in your name or where you are the beneficial owner²¹
• Joint accounts: each account holder is protected up to £120,000 in total across all accounts they hold, regardless of the number of account holders²¹
• Business accounts: if your business is a separate legal entity, such as a limited company or LLP, you could claim up to £120,000 for each account, separate from your personal claim²⁰

The full detail is on FSCS compensation limits and what the FSCS does not cover.

When both banks become one: checking your savings against the limit

This is the change that catches people out after a takeover. Before a merger, two banks each had their own licence, so you could hold up to £120,000 with each and be fully protected. Once they share a licence, the £120,000 compensation limit applies to the total amount you hold across all these accounts, not to each separate account².

The FSCS gives a worked example: if a current account and a savings account share one authorisation number, they are classed as a single firm, and the limit for compensation is £120,000 in total, shared across both¹⁸. The same rule applies if you have an individual account and a joint account within the same banking group: the £120,000 limit applies across all these accounts, not to each separate account¹⁹.

This is exactly what happened to customers of Tesco Bank and Barclays, and of Sainsbury's Bank and NatWest: after the mergers, the £120,000 limit became shared between the banks³. Someone who had £120,000 with each bank before the merger was fully protected; afterwards, £120,000 of the combined total sat above the limit.

If you hold a joint account, note that each holder is protected separately for their share, and a joint account normally allows two or more people to receive payments, pay by debit card, transfer money and manage the account, depending on the bank²². The dedicated pages on FSCS protection when bank brands share a licence, FSCS cover on joint accounts and keeping savings above the FSCS limit covered go through the options, including spreading money across separately licensed banks.

Payments, direct debits and refunds during a transfer

Direct debits are covered by the Direct Debit Guarantee: if the bank, or an organisation you are paying, makes a mistake, your bank must refund the payment to you²³. This applies during a transfer just as it does at any other time, so a direct debit taken twice or taken in error during a migration is refundable.

Under the Current Account Switch Service, the new bank must refund you for any charges incurred as a result of a direct debit or standing order not having been successfully transferred to the new account²⁴. This is the safety net that makes switching low-risk: if a payment fails because of the move rather than because of you, the resulting charges are not yours to bear.

The mechanics of a switch are worth knowing. You can still use your old account up to day 6 of the switch, but any new payments set up during the switch will not be transferred¹². After the switch completes, payments sent to or from the old account are redirected to the new account for at least 3 years¹².

If a payment goes wrong in a way the switch guarantee does not cover, your bank still has duties to investigate and, in some cases, refund. The page on when a payment goes wrong sets these out.

Branch closures and access to cash after a takeover

Mergers often lead to branch closures, as the combined group closes overlapping sites. The Clydesdale and Yorkshire brands being phased out in favour of Virgin Money is one example where the merger has led to closures⁸. The wider picture is substantial: banks and building societies have closed 6,871 branches since January 2015, at a rate of around 53 each month, which represents 69% of the branches that were open at the start of 2015²⁵.

*A shut branch with a notice in the window, a common sight as merged groups close overlapping sites.

There are rules around access to cash. The 14 largest banks and building societies in the UK must conduct cash access assessments in response to trigger events, which can include a branch closure²⁶. The Financial Conduct Authority has published information clarifying what these reviews can look at, added in February 2026²⁷. The aim is that a closure cannot simply remove the last source of cash in an area without alternatives being considered.

If your branch closes after a takeover, your account itself is unaffected: banking continues through the app, online and by phone, and cash access may be maintained through alternatives such as post offices or cash machines. Banks and building societies must make sure their services are accessible¹¹, and if you rely on branch access, the closure notice should tell you what the alternatives are and how to have your say during the assessment.

Moving your account if you don't like the new bank

You are not tied to the new owner. If you do not want to bank with the group that has taken over your account, you can switch to a different bank or building society, and the Current Account Switch Service makes this straightforward²⁴.

The process is: contact the new provider's customer services, ask it to transfer your balance and all incoming and outgoing payments, and it handles the switch, including moving direct debits and standing orders²⁹. The steps involved are opening the new account before closing the old one, cancelling or moving standing orders and direct debits if the full switch service is not being used, returning unused cheques and cards cut into pieces, and leaving enough money to cover uncleared cheques if a balance is being transferred¹⁰.

One thing to sort out before switching is any overdraft. If your new account's overdraft covers what you owe, the funds will be sent to your old bank and you will owe the overdraft balance on the new account instead. If it is a lower amount, or you cannot get one, you will need to arrange to pay off the remainder separately before you can switch or close your old account²⁹.

If you cannot get a standard current account, fee-free basic bank accounts exist. The largest banks have to offer them, including Virgin Money, which covers the Clydesdale and Yorkshire Bank brands³⁰. Guidance on how to choose the right bank account and on basic bank accounts is available free from MoneyHelper³¹.

When you owe the new bank money

A takeover can change the relationship between money you hold and money you owe, because the new owner may bring your debts and your deposits under one roof.

If you have an overdraft or other debts on your current account and you open a basic bank account at the same bank, the bank may use the money in the new basic account to pay off the debts in the old overdrawn account¹⁰. The same applies within a group: a bank in the same banking group may use money in the new basic account to pay off debts on your old account⁹. If you receive benefits, tax credits or a state pension, guidance suggests considering opening a basic account at a different bank to avoid this¹⁰.

In more serious debt situations the rules are firmer. During bankruptcy, your bank is unlikely to let you keep your account if you have an overdraft or other debts with it, and any money left in your account will be given to the official receiver³². If you use a joint bank account, it will be frozen, and the bank may close it and refund half the money to the other person, or remove your name from the account³². In Scotland, with high street banks your account is likely to be closed or downgraded under sequestration, savings accounts including joint names will often be closed with funds transferred to the trustee, and a basic bank account can be opened as an alternative³².

If you are struggling with debts, free impartial help is available from debt charities such as StepChange and Business Debt Line, and the debt section of this site explains the options. Banks and building societies should have a specialist team who can offer customers additional support, which can include a payment holiday, an agreement to pause interest or charges for a set amount of time, or tailored support for managing debts³³.

Interest, credit cards and loans after a change of owner

For savings, the new owner can change the interest rate, but it must tell you first, and you can usually move your money. The effect of a rate on your savings compounds over time: banks pay interest on the money you hold with them, which increases the value of your account balance, and you then get some interest on that increased amount³⁴. A rate cut after a takeover therefore reduces not just this year's interest but the base on which future interest is earned.

For credit cards and loans, the agreement usually continues with the new owner, but terms can change if the contract allows and you are told in advance. One point that catches people: if you took out credit in your name for another person, any default on that agreement will appear on your credit file, not theirs, whoever owns the debt³⁵. A change of owner does not change whose name the agreement is in.

If terms change in a way you were not properly told about, or the transfer itself causes a problem with your card or loan, you can complain through the bank's own process and then to the Financial Ombudsman Service, in the same way as for any other dispute.

Complaints: eight weeks, then the Financial Ombudsman

Banks and building societies are required by law to have a written complaints process which tells customers how to make a complaint⁵. The bank or building society must investigate your complaint and give you a clear answer within eight weeks⁵.

The sequence is:

1. Contact the bank's customer services and make a formal complaint, following its written complaints process⁵
2. Give the bank up to eight weeks to investigate and give a final response³⁶
3. If the bank does not respond within eight weeks, or you are unhappy with its response, take the complaint to the free Financial Ombudsman Service³⁶

The Financial Ombudsman Service can look at complaints arising from a transfer, including problems with payments, account closures and changes to terms. One limit to know: if you decide to take the matter to court before complaining to the Ombudsman, you will not be able to complain to the Ombudsman at a later date⁵. The pages on how to complain to a financial firm, taking a complaint to the Financial Ombudsman Service and the eight-week rule cover the process in detail.

Scams that target customers during a bank transfer

Periods of change are opportunities for fraudsters, because customers expect letters, emails and app changes around a takeover and may be less suspicious of contact that claims to be about the move.

Banking fraud is when criminals gain access to your bank account using your personal details and passwords, and take money from your account; the stolen details are then used to access your account and make unauthorised payments³⁷. Criminals often impersonate trusted organisations, such as banks, HMRC and broadband providers, to get this information³⁷. A letter or call about a merger is a natural cover for exactly this kind of impersonation.

Some protections exist on the payments side. With Confirmation of Payee, banks can check the name on a new payee's account as well as the sort code and account number, which helps catch payments sent to a fraudster posing as your "new bank"³⁸. Regulators have also warned about impersonation tactics including identity theft and account takeover, fraudulent duplicate accounts, weak credential exploitation and fraudulent death claims³⁹.

The scams and fraud section explains the main types of fraud and where to report them, and what happens if a bank fails covers the separate question of a bank actually collapsing rather than being taken over.