01 Mar Half of UKs cash machines ‘face closure’
Half of Britain’s cash machines could close within two years unless banks are forced to support them, experts have warned.
Some of the UK’s 41,000 free network could be shut, including 4,000 machines in rural and poorer communities, as they become too expensive to run, according to the estimates.
The scenario was raised on a call with regulators, lenders and other groups last week about how to preserve access to cash for those who need it.
The slump in cash withdrawals as a result of the pandemic has intensified the trend of people switching to digital payments. Since the start of last year, 3,300 free-to-use cash machines and 431 bank branches have closed, Which?, the consumer group, thinks.
The “cataclysmic cliff edge” could lead to the collapse of cash being available across the country, according to an insider to the talks.
Latest data from the Financial Conduct Authority shows that five million people depend on cash and 16 per cent of the population are finding it difficult to access cash. One problem is that in areas where free ATMs close, people have little choice but to use paid-for ones, which charge £2 a withdrawal, punitive for some people.
The chancellor promised legislation to protect access to cash across the country in last year’s budget, but little progress has been made. There have been months of talks between the Treasury, the FCA, banks, the Post Office, the Link cash machine network and consumer groups, but they have not led to any concrete plans.
On the call between members of the group last week, some banks said that they would support the Link network only for a year and the Post Office banking agreement, which enables people to access their accounts via the Post Office, only until next year.
Consumer groups want banks to be forced by the government to pledge a five-year deal to allow the Post Office to invest in its banking services and to allow Link to manage its national network, including commitments to keep machines in protected areas.
Gareth Shaw, head of money at Which?, said that without a timetable for action, “the government has left the future of a network that millions of people rely on in limbo. Without a long-term strategy, its pledge will be undermined if firms are able to take commercial decisions in the interim that erode the availability of cash even further.”
There are also fears about the future of a scheme to allow people to access cash at corner shops without making a purchase. A pilot is operating in thirteen shops in four areas but it requires legislation to be rolled out more widely. If this week’s budget does not make a new pledge to create the rules, the scheme could fall apart, experts said.