It is now or never to halt the cash crisis, says Which?

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 (FSB).

FSB national chair Martin McTague, who sits on the Access to Cash Pilots Board, said: “This Queen’s speech is the last chance saloon where protecting access to cash is concerned.”

A Treasury spokesperson said: “We know that cash remains vital for millions of people and we are committed to protecting access to cash across the UK.

“That’s why we have consulted on plans for new laws to make sure people only need to travel a reasonable distance to pay in or take out cash, and have already legislated to enable shops to offer cashback to customers without them having to make a purchase.

“We have considered responses to the consultation and will set out next steps in due course.”

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.

The constituencies Which? identified are Plymouth, Moor View; Forest of Dean; North East Derbyshire; Hazel Grove (Greater Manchester); Central Suffolk and North Ipswich; Wirral West; Harrow East (London); Penistone and Stocksbridge (Yorkshire); South Staffordshire; Mid Bedfordshire; Stone (Staffordshire); Buckingham; South Cambridgeshire; Sheffield Hallam; Clwyd South; Carmarthen East and Dinefwr; and Gower.

Which? counted 25 ATMs in Sheffield Hallam, among which it found seven charge a fee.

Harrow East meanwhile has lost nearly 60% of its free ATMs since 2018, Which? said.

Carmarthen East and Dinefwr in Wales has lost 13 out of 15 bank branches since 2015, and has a relatively high proportion of elderly residents, Which? said.

People aged 65 and over make up around a quarter (23%) on average of the population across the 17 constituencies that Which? said have poor access to cash.

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-to-day banking over post office counters.

Ross Borkett, head of banking at the Post Office, said: “In many places across the country, Post Office is providing the last counter in town where people can access cash.”

He added: “Our postmasters continue to provide convenient and secure access to cash services, helping to protect cash and supporting local communities and businesses.”

John Howells, CEO of ATM network Link, said: “While cash usage has fallen by around 40% since the start of the pandemic, millions of consumers including some of the most vulnerable still rely on cash every day.

“Link believes that consumers in every community across the UK should have free access to cash and works with the industry to maintain it.

“While today, over 99% of high streets have free access to cash via either a nearby ATM or Post Office, as ATM numbers continue to fall, legislation is needed now to move the voluntary commitments of industry into a more formal and regulated arrangement.”

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.

“Recent research from the Financial Conduct Authority found that the vast majority of people continue to have free access to cash locally.

“In December 2021, the Access to Cash Action Group (CAG), chaired by Natalie Ceeney, set out plans on how the industry will deliver on its access-to-cash commitments through a range of solutions, including shared bank hubs and free ATMs, alongside cashback without purchase which was recently expanded to cover over 2,000 shops.”