Santander UK is facing a growing backlash from small business owners after introducing charges to business accounts that were previously guaranteed to be “free for life” — prompting accusations of broken promises, misleading conduct, and possible regulatory scrutiny.
An open letter submitted this week to Santander’s top executives, and shared with Business Matters, outlines the growing frustration among SMEs who feel misled after banking with Santander for more than a decade under what they believed was a permanent fee-free agreement.
“This wasn’t a vague marketing statement — it was a binding commitment,” writes Steve Richardson, managing director of Full Production Ltd, who opened a business account with Santander in 2010 based on the written guarantee. “To revoke that commitment now, more than a decade later, under the guise of internal product migration, is both misleading and ethically questionable” .
Santander’s original marketing material from 2010 offered “Free Business Banking, For Life”, with a caveat that charges would only apply if laws or banking regulations changed. In the absence of any such change, customers assumed their accounts would remain free.
That promise was tested in 2012, when Santander attempted to reclassify accounts and impose fees. After public pressure, the bank reversed course and upheld the original free-for-life commitment — an act widely praised at the time by consumer groups and the press .
Fast forward to 2025, and the story has resurfaced — only this time, the change is going ahead. Santander claims the affected accounts were migrated to its “Business Every Day” product in 2015, and that the original terms no longer apply. But many customers say they were never informed that such a migration would void their lifetime fee guarantee, and feel blindsided.
Business owners speak out
The open letter — addressed to Mike Regnier, Chief Executive of Santander UK, and Enrique Álvarez Labiano, CEO of Retail and Business Banking — warns that thousands of SMEs could be affected and calls for Santander to honour its original commitment.
“If a bank cannot stand by its word — especially one given in writing and without caveat — what confidence can customers have in any future product or assurance?” the letter asks.
Some business owners have already submitted complaints to the bank and financial regulators, with calls for parliamentary and media scrutiny now growing. The issue has also caught the attention of The Guardian, The Telegraph, and the BBC, reviving concerns about long-standing trust issues between high street banks and small business customers .
The latest charges introduced by Santander include an annual £120 fee on what were previously free accounts. Customers are also being asked to consider migrating to alternative packages — none of which match the original free-for-life promise.
Critics argue that, in addition to undermining trust, the decision comes at a particularly difficult time for SMEs, who are already facing rising costs, squeezed margins, and a fragile economic environment.
While Santander insists it is acting within the terms of its account agreements, business owners and legal commentators are questioning whether a unilateral reclassification of accounts can override an explicit, written lifetime guarantee.
“The right to change an account type does not override or invalidate a specific and binding contractual promise,” the letter argues. “None of the [stated] exceptions — changes in law, regulation or tax — apply here” .
If regulators agree that the promise constituted a contractual assurance, Santander could face formal complaints and potential enforcement action. At the very least, it risks reputational damage at a time when trust in retail banking remains fragile.
Santander has yet to issue a detailed public response, though affected customers have already begun contacting their MPs and industry bodies. Business Matters understands that pressure is mounting for the bank to issue a revised statement — and potentially backtrack once again, as it did in 2012.
With legal claims now being explored and press attention intensifying, this story is unlikely to disappear quietly.
“This is not simply about fees. It’s about trust,” the letter concludes. “A promise made in good faith… should not be quietly abandoned.”
