Action needed to protect access to our own cash
The cash network has already been dramatically eroded and unless urgent action is taken it will crumble completely Jenny Ross
THE UK’s cash system is reaching a tipping point and will collapse without legislation to protect it, according to research into how people access coins and notes. Panel members behind the Access to Cash Review, which published its final report a year ago, said legislation is needed to protect cash for as long as people need it.
They said that in the 12 months since the final review, while some progress has been made, significant issues within the cash infrastructure remain.
The review was set up by ATM network Link as an independent body to understand consumer needs and implications for cash access requirements over the next five to 15 years.
It previously predicted that society would be at the point of being “virtually cashless” by 2035, with fewer than one in ten transactions being made in cash.
But it said trade association UK Finance now expects the UK to hit this point within the next decade. Panel members also pointed to figures showing that, over the past year, 13 per cent of free-to-use UK ATMs have closed, as lower levels of cash use have made them economically unviable. A quarter (25%) of ATMs now charge people to withdraw their cash.
They also said the Post Office’s cash access service has come under serious threat.
Various initiatives have been set up by the industry to help maintain people’s access to cash, including cashback initiatives at local shops and a “request an ATM” service.
But the panel said it believes the only way to manage the cash system is for the Government to legislate and give regulators the tools that they need to protect cash access. Banks should be obliged to provide suitable cash access to their customers, it argued.
Natalie Ceeney, independent chairwoman of the Access to Cash Review said: “The UK is fast becoming a cashless society – without knowing what this really means for consumers or for the UK economy. Many people may want a completely digital future, but we need to make sure that this shift doesn’t leave millions behind or put our economy at risk.
“I’m glad that our report of a year ago made the industry and regulators take the issue of cash far more seriously. We welcome the positive initiatives from the banking industry and much needed co-ordination from regulators.
“However, commercial pressures on all businesses mean that we cannot rely on the status quo, and we can see serious strains emerging.
“Regulators currently don’t have the tools that they need to ensure that everyone who needs cash can get it. Now is the time for Government to protect cash and allowing us to look ahead to how we can prepare for a digital future which includes everyone.”
Which? money editor Jenny Ross said: “The cash network has already been dramatically eroded, and, unless urgent action is taken in the Budget, it’s clear that it will crumble completely.
“Some industry-led initiatives are encouraging, but they cannot stem the tide of bank branch and cash machine closures alone, and without legislation many more communities will be cut off from cash or forced to pay hefty fees to access their own money.”
A spokesman for the Treasury said: “Technology has transformed banking for millions of people, but we know that many still rely on cash.
“That’s why we’ve invested £2 billion to ensure everyday banking services are available at 11,500 Post Office branches across the UK.
“We’re also working closely with industry and regulators to ensure everyone who needs cash can access it.”