Treasury plans legal cap on distance to cashpoints

Under new Government proposals, the public will be given the legal right to access cash a "reasonable distance" from their home.

 

Following an independent review which warned the closure of bank branches and cashpoints was putting the country on course to become cashless by 2035, the Treasury has published plans to set a cap for the maximum distance businesses and the public should have to travel to access cash without a charge. 

 

In a move that could mirror existing rules for the Post Office network - which dictate 99 per cent of the population must be within three miles of their nearest branch - the Treasury plans to set "geographic requirements" to ensure the public can continue withdrawing and depositing cash.

 

Despite the number of free-to-use cashpoints falling by nearly a quarter in the past three years and around 55 bank branches closing every month, around 90 per cent of neighbourhoods in Britain are within one kilometre of a free cash access point. When locations providing cashback are included, around four in 10 neighbourhoods have free access to cash within 250 metres, which rises to 93 per cent within one kilometre. However, campaign groups have said the closures have hit the elderly, the digitally non-savvy and workers paid in cash particularly hard.

 

In a move that will disappoint some campaigners, the Treasury's proposals do not include requirements for bank branches to remain open. Sarah Coles, of fund shop Hargreaves Lansdown, said: "This will come as a bitter blow to those who can't imagine life without their local branch. "Instead, the proposals focus on ensuring you don't have to travel miles to get your hands on your money. "The low interest rate environment that we'll need to recover from the pandemic will make matters even worse, because banks find it harder to make money, and so they're looking to cut costs by closing more branches." 

 

A survey from City watchdog the Financial Conduct Authority found that 16 per cent of vulnerable adults relied on physical cash. Dependency on cash was highest among pensioners over the age of 85, and 1 in 10 adults said they would struggle to cope in a cashless society. A poll by consumer group Which? found that more than a third of people were prevented from paying with cash since the pandemic began, with some shops using fears around coronavirus transmission as an excuse to ditch cash entirely. Despite these statistics, around 1.2 million consumers continued to use cash for the bulk of their day-to-day spending throughout the last year. 

 

The Treasury consultation will run until Sept 23. The Treasury said: "The Government recognises that cash provision remains an area of concern for many individuals, consumer groups, and others representing cash users, including the more vulnerable groups of society." The process would be overseen by the FCA.

 

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