Customers ‘cut adrift’ by branch and ATM cuts
NEARLY a quarter of free-to-use ATMs have vanished since 2018 and almost half of bank branches have been earmarked for closure since 2015, according to Which?
The consumer group said customers who rely on face-to-face banking services and cash to pay for everyday essentials are at risk of “being cut adrift”.
The UK Government has previously said it will legislate to protect the future of cash, and Which? is calling for this to happen in the Queen’s speech next month.
The consumer champion also sent a letter to the Treasury on Monday which says: “With rising living costs placing additional pressure on people’s personal finances, the consequences of being unable to withdraw cash for those consumers who already rely on it could be significant.”
The letter continues: “Unless legislation is introduced urgently, the ability to access, spend and deposit cash could be permanently lost for many consumers, leaving some of society’s most disadvantaged at risk of financial exclusion with no way to pay for the goods and services they need in their daily lives.”
The letter is also backed by other organisations including Age UK, Fairer
Finance, the British Retail Consortium (BRC), StepChange Debt Charity, the Money and Mental Health Policy Institute, and the Federation of Small Businesses.
Which? said since 2015, 4,685 bank branches have shut their doors, with a further 226 already scheduled to close by the end of the year. It said this equates to nearly half of the network.
The consumer group found the rate of branch closures in rural areas has outstripped those in urban areas. Since 2015, the banking network in rural constituencies has been cut by half (50.7%), compared with 47.3% in
urban areas. It said the deterioration of the UK’s ATM network, including free-to-use cash machines, has compounded the problem.
Since 2018, 12,178 free-to-use ATMs have been cut, which is equivalent to nearly a quarter of free cash machines, the consumer group added.
Which? also identified 17 parliamentary constituencies, accounting for more than 1.5 million people, that have particularly poor access to cash - with three or fewer bank branches and 30 or fewer free-to-use ATMs.
These range from rural areas where the patchy public transport system makes the problem of dwindling cash access worse for an older than average population, to relatively deprived urban areas where residents struggling during the cost-of-living crisis might need to use cash for day-to-day budgeting, Which? said.
More affluent student areas and villages in the Home Counties were also found to be affected.
Jenny Ross, Which? Money editor, said: “It really is now or never to halt the cash crisis.
“Though banking industry proposals for action are welcome, what’s needed most is the legislation promised by the Government to protect cash. This should also include making the FCA (Financial Conduct Authority) the key regulator to protect cash services.”
The Post Office helps to fill gaps in the cash system. It has an agreement with many banks which allows the banks’ customers to do their day-today banking over post office counters.
Other industry initiatives have also been taking place to protect cash access, such as cashback in shops and “banking hubs” where facilities are shared.
A UK Finance spokesperson said: “While cash use has declined, it still remains the second most common payment method behind debit cards and the banking and finance industry has committed to ensuring there is continued access to cash for those who need it, when they need it.”