Now or never to save cash, Which? warns, as new research reveals ATMs and bank branch network cut to the bone

Almost a quarter of free-to-use ATMs have vanished since 2018 and almost half of the UK’s bank branches have closed since 2015, Which? analysis finds, as the consumer champion warns it is now or never to halt the country’s cash crisis. 

The UK’s ATM and bank branch networks have seen significant reductions in recent years, leaving many customers who rely on face-to-face banking services and cash to pay for everyday essentials at risk of being cut adrift. 

The consumer champion is calling for the government to finally deliver on its long overdue promise from 2020 by including legislation to protect cash in next month’s Queen’s Speech. Another year of inaction could risk an irretrievable collapse of the country’s cash system. 

Which? research shows that since 2015, 4,685 bank branches have shut their doors, with a further 226 already scheduled to close by the end of the year. This equates to almost half of the country’s total network. 

Compounding the problem for the millions of consumers who still rely on cash is the deterioration of the UK’s ATM network – and in particular free-to-use (FTU) ATMs. Since 2018, Which? analysis found that 12,178 free-to-use ATMs have been cut, which is equivalent to almost a quarter of FTU ATMs. 

Which? has identified 17 parliamentary constituencies, accounting for more than 1.5 million people, that have particularly poor access to cash (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. But more affluent student areas and villages in the home counties are also affected.

Elderly consumers – those aged 65 and over – made up a quarter (23%) on average of the population across the 17 constituencies with poor access to cash, yet are among those most likely to rely on cash as a payment method. 

Those living in rural communities, where residents often have to travel for miles to reach their nearest alternative source of cash, are also among the most reliant on it. However, digital infrastructure can be poor in these areas, making it harder for residents to embrace online banking and payments. 

Janice Bell, from Penarth in the Vale of Glamorgan, told Which?:

“Two banks in my local high street have closed recently and a third has just announced its closure. I struggled to get my Dad to use WhatsApp in lockdown, so the expectation that he can manage without a local bank and access to cash is totally unrealistic.”

Which? analysis found that 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 per cent in urban areas. 

On average, rural constituencies have just 0.1 bank branches per 10sq km and 1.1 ATMs, compared with 2.6 branches per 10sq km in urban areas and 31.3 ATMs.

While proposals to protect access to cash put forward by the banking industry, such as shared banking hubs, could play a role in preserving access to it, Which? believes they must be targeted and of sufficient scale to plug the gaps left by bank closures. 

Ultimately current measures are voluntary and are therefore subject to change based on commercial decisions made by individual firms. At present, there is nothing to prevent banks from withdrawing from these measures at any point. 

It has been almost two years since the government promised to protect access to cash. Which? believes legislation must be introduced in next month’s Queen’s Speech if the imminent collapse of the UK’s cash infrastructure is to be avoided. The government should also tackle the current lack of regulatory oversight of bank branch closures by appointing the Financial Conduct Authority as the key regulator to protect cash services. 

Jenny Ross, Which? Money Editor, said: 

“While many consumers have embraced digital banking, there are still millions, including the elderly, vulnerable and isolated, who aren’t yet ready or willing to make that switch – and they must be protected. 

“Our research highlights the devastating impact widespread bank branch and ATM closures have had on communities. With just two weeks to go until the Queen’s Speech, 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 the key regulator to protect cash services.”

The RSN has, as part of the Revitalising Rural campaign, has published the below asks of Government in relation to access to cash:

Bank branches: the code which banks follow before closing a branch needs strengthening, so that decisions can be challenged and reversed. Branch closures continue at pace and the self-implemented code is little more than a box-ticking exercise. Alongside this, protecting the Post Office network is also very important.

Access to cash: the Payment Systems Regulator should follow-up its recent report on access to cash by monitoring the trend in rural areas.   As legislation to support access to cash is developed, we strongly believe the Government must:

1. Act without delay to prevent further deterioration of cash infrastructure, introducing interim measures to protect cash access points at pre-pandemic levels and force LINK’s bank members to enable ATM deposit taking through the LINK scheme while longer-term regulation is developed.

2. Protect ATMs – as the only sustainable national infrastructure that can maintain free access to cash 24/7, re-introducing independent assessment of interchange fees.

3. Protect key schemes including LINK and the Post Office framework by making bank membership mandatory.

4. Include deposit-taking facilities in the definition of ‘reasonable access’ and ensure requirements reflect consumers’ lived experience as opposed to an arbitrary as-the-crow-flies measurement.