Pensioners out in the cold – But banking hubs offer a glimmer of hope
23 September 2024, 10:47 | Updated: 23 September 2024, 12:26
Millions have been impacted by the sudden disappearance of bank branches from Britain's fading high streets—none more so than older people, who, with the winter fuel allowance stripped away, need financial advice and support more than ever.
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Since 2014, the number of banks in the UK has collapsed by 50%. In 1986, there were 21,643 bank branches and building societies in the UK – but now there are fewer than 6,000.
This is why the Financial Conduct Authority (FCA) putting stricter rules on bank closures alongside fifteen new banking hubs opening on our high streets are so welcome. They offer a glimmer of hope to our communities and small businesses at a difficult economic time.
Research by my campaign group, the Belonging Forum, found that older people and regions outside London have been disproportionately hit by the closures.
We polled over 10,000 people last December, and 7 in 10 people over 65 say bank closures have hurt their local area. Meanwhile, only one in three 18-24-year-olds say they had even noticed a bank branch closing. Regionally, bank closures are experienced most in the Northwest and Southwest (63%) and lowest in London (50%).
We submitted this evidence to the FCA consultation on access to cash earlier this year —and we are happy to see them act. Cash continues to have a significant convening power in an increasingly isolated world.
Many older people in particular rely on face-to-face banking—and cash for that matter—more than many teenagers can imagine.
When older people need advice, their first port of call isn’t YouTube tutorials, Martin Lewis blog posts, or finance influencers on social media—it is the physical financial institutions in their community. It’s the banking professionals and familiar faces on their high street.
Older people— expected to use new services like digital payment and online banking, which they may not fully trust or understand — may feel less secure about where/when they spend their money and more exposed to harms like fraud and theft without banking services nearby.
This nervousness around online banking is fuelled by a widespread perception that support offered by banks over the phone and online is not sufficient or reliable. People are put on hold for long periods, and AI chatbots are impersonal and hard to trust.
This is in contrast to bank managers, who are trusted local figures for advice and reliable signatories for important documents such as passport applications. Their disappearance has happened at a time of rapid digital change, forcing older people to adapt so they can continue to participate in the economy and their community – or else they get left out in the cold.
In these difficult times, there is also evidence that it is not just older people who rely on cash and physical banking. According to a UK Finance report, cash usage spiked after lockdown as the cost-of-living crisis took hold, with research indicating many used physical money to help them budget and keep track of their outgoings.
When people were asked to select the shops and services that would make up their ‘dream’ high street by Metro Bank recently, bank branches were the most popular choice to feature the nation’s high streets (62% put it top), followed by cafés (59%), Post Offices (56%) and bakeries (54%).
I like a hot croissant or a chocolate cake from a bakery or café as much as anyone—but it’s not hard to see why banks came top with their essential role in our lives bringing social and economic connection.
There is a less material aspect to this debate—perhaps even more important: the positive community impact that having physical spaces like banks on our high streets to meet and convene brings.
When spaces such as banks and even cash machines disappear from the High Street, the spaces within which local communities meet, exist, and support each other are reduced.
Services move online, but so do social interactions and other benefits that in the past have flowed from the High Street, such as mutual support networks.
The social and economic benefits of vibrant High Streets, of which banks are a key pillar, are widely recognised.
I therefore urge the FCA, who will be assessing whether areas have reasonable access to cash when they close branches, to also consider the impact closures will have on social connection.
As Ricky Burdett, Professor of Urban Studies at LSE and Director of LSE Cities, writes: “Britain’s high streets are part of a complex ecosystem that requires multi-level intervention rather than simplistic solutions and knee-jerk reactions. They are an intrinsic part of the social and economic fabric of our cities.”
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Kim Samuel is the founder of the Belonging Forum and author of On Belonging: Finding Connection in an Age of Isolation.
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