Why banks block customers from their bank accounts

Banks freeze joint accountsHave you ever wondered what could happen to your bank accounts if you or your partner become mentally incapacitated?

If you have joint bank accounts with a spouse or partner you might assume you and your partner could withdraw money from your joint bank accounts even if one of you loses mental capacity.


Yet over the last few years, there have been lots of examples of banks freezing joint accounts even when there has been no obvious suspicious activity.

When might your joint bank accounts be frozen?

Your bank could decide to freeze your joint account if something makes the bank think you may have lost mental capacity. Some banks block accounts without any direct evidence of mental incapacity, for example, if regular payments to a care home are made from a joint account.


Usually, a bank prevents withdrawals from joint bank accounts if they’re suspicious. Some existing direct debits and standing orders might continue. Couples whose pensions are paid into their joint bank accounts may suddenly find themselves cut off from their money. You might be unable to pay for basic necessities like food, travel, clothing and medicines.

What authority do banks have to freeze accounts?

The British Banking Association (BBA) issued guidance to the banking industry which led to this policy being adopted by most banks in the UK. Since the BBA issued its guidance in 2013 most of the major high street banks have changed their terms and conditions to allow them to restrict withdrawals.

Some customers may be locked out of their own bank accounts until they can produce a valid registered Lasting Power of Attorney or Court of Protection order.  That could take weeks or even months if an application for a court-appointed deputy has to be made.

Are banks assessing customers’ mental capacity?

Some bank customers are now more or less in the position of having their mental state ‘assessed’ by bank employees each time they want to withdraw money from their own bank accounts.

The Mental Capacity Act 2005 s1 states that everyone is to be assumed to have mental capacity unless it’s established they don’t. But if you’re elderly or have a speech or hearing impairment, or you’re just feeling a little bit distracted on the day you visit your bank, or perhaps you can’t see to enter your PIN number what then? Could you find the bank’s employees jump to the assumption you’re mentally incapable? Suddenly you may have to prove you’re not. Sounds extreme? Perhaps but it’s certainly something to think about….

Don’t run the risk of being blocked from using your bank account. Find out how to set up up a Lasting Power of Attorney now.

Ask for our Lasting Power of Attorney information pack here