Access to Cash

Cash

UPDATE JUNE 2023

The Financial Services and Markets Act 2023 has now received Royal Assent. Supported by Rebecca at every stage this places free access to cash into law.

The vast majority of people and businesses are set to be no further than three miles away from withdrawing cash under a new framework by the Treasury, setting the minimum expectations on banks to protect services for people and businesses wanting to withdraw or deposit cash.

As part of this move, the Financial Conduct Authority (FCA) has been provided new powers by the government to protect the provision of cash access services. This includes protecting cash access without any fees for those who hold personal current accounts. The FCA will use these newfound powers to make sure banks and building societies are keeping up to these standards – and have the power to fine them if they do not.

While the country is moving further away from using coins and notes with the number of online payments rising from 45% to 85% in the past ten years, cash can still be an integral part of many businesses and people’s lives.

As it stands, the vast majority of people living in urban areas can access cash deposit and withdrawal services within one mile; with rural-dwellers around three miles away. Today’s policy statement makes clear that the FCA should use its powers to maintain this level of coverage, while recognising that needs may differ by location and change over time. 

It also makes clear that – if a service is withdrawn and a replacement service is needed – this should be put in place before the closure takes place. 

The FCA is also required to ‘have regard’ to local deficiencies in cash access. The policy statement sets out that the regulator should consider factors such as the opening hours and distance to cash access services, as well as the need for in-person assistance.

Laws introduced in the Financial Services Act 2021 have delivered cashback in over 2,500 shops across the UK – without any need to buy something in store – through the LINK network.

 

UPDATE MAY 2022

The Government recognises the importance of cash to the daily lives of millions of people across the UK, particularly to those in vulnerable groups, and has announced that it will legislate to protect access to cash in the Financial Services and Markets Bill.

The new Financial Services and Markets Bill announced in the Queen’s Speech will support consumers by protecting access to cash. It will ensure the continued availability of withdrawal and deposit facilities across the UK, and that the country’s cash infrastructure is sustainable for the long term. The Bill builds on the Financial Services Act 2021, which was the first step in amending the UK’s regulatory regime outside of the EU.

In May, the Government published a summary of responses to the Access to Cash consultation. This set out the Government’s intention to establish the Financial Conduct Authority as the lead regulator for retail cash access and provide it with appropriate powers for ensuring that designated firms continue to ensure the provision of deposit and withdrawal facilities across the UK. The FCA’s powers will allow it to address cash access issues at both a national and local level.

HM Treasury will publish its expectations in a policy statement, which the FCA will be required to have regard to in carrying out its functions. The Government intends to enable HM Treasury to specify baselines for reasonable access to cash withdrawal and deposit facilities across the UK, including in rural and urban areas, initially on the basis of current cash access provision.

Around 96% of the population are within two kilometres of a free-to-use cash access point. This includes free-to-use ATMs, bank branches and Post Office branches.

 

"Access to cash remains vital to the day-to-day lives of individuals in our local communities across Castle Point. 

I welcome that the Financial Conduct Authority has been made ultimately responsible for ensuring the cash system works for consumers and businesses. Following this, in September 2020, the FCA published guidance setting out expectations that firms should consider the impact of branch and ATM closures on their customers’ everyday banking needs and consider the availability and provision of alternatives.  I also strongly welcome that the Government legislated through the Financial Services Act 2021 to facilitate the widespread adoption of cashback without a purchase.

I understand that Ministers remain closely engaged with financial regulators during this time to monitor and assess risks around cash acceptance and access resulting from COVID-19. I welcomed the news that legislation will be brought forward to protect access to cash.

The Treasury is committed to protecting access to cash for those who need it and I welcome that a Call for Evidence was published in October 2020 which sought views on the key considerations and regulatory oversight of the cash system. The Call for Evidence has now closed and on the basis of responses a consultation has now been launched as the next step in legislating to protect access to cash and ensuring the sustainability of the UK’s cash infrastructure. The Access to Cash consultation sets out proposals to further legislation, and I look forward to seeing the positive outcomes of the consultation." - Rebecca, March 2022

 

ATMs 

  • Key findings of a report led by the University of Bristol in partnership with the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR), are: Free access to cash is readily available on almost all (99 per cent) of UK high streets within 500 metres. Just over three-quarters (77 per cent) of neighbourhoods have some form of free access to cash within 500m.
  • At present, LINK, the scheme responsible for ATM provision in our country, provides a top-up subsidy for free-to-use ATMs in remote areas. I was glad to hear that the upper limit on these top-up subsidies rose from 30 pence to £2.75.
  • LINK has promised to protect free ATMs more than one kilometre away from the next nearest free ATM or Post Office.
  • LINK has also committed to protecting free access to cash on high streets that do not have a free-to-use ATM or Post Office counter within one kilometre.
  • This is expected to benefit up to 3,500 free-to-use ATMs across the country. I also welcome that, as of September 2019, there were approximately 45,000 free-to-use cash machines across the UK, which represents a 13 per cent increase from a decade ago. 
  • UK Finance launched its Community Access to Cash initiative to help local communities to identify and secure access to cash and payment services. This follows UK Finance’s engagement with consumer representatives, local authority representatives and market participants on the cash needs of local communities. 
  • The Payment Systems Regulator has previously used its power to hold LINK to account over its commitment to communities, ensuring that there is a continued high level of access to cash. 

Bank Branches

  • It is vital that all customers, wherever they live, can still access over-the-counter services. I am glad the Government is supporting the Post Office’s relationship with the banks. An agreement enables 99 per cent of banks’ personal customers, and 95 per cent of banks’ business customers, to withdraw cash, deposit cash and cheques, and make balance enquiries at a Post Office counter across a network of 11,600 branches.
  • I welcome that the Financial Conduct Authority has published draft guidance outlining their expectation of firms when they are deciding whether to reduce their number of physical branches or free to use ATMs. The FCA made it clear that firms should consider the impact of any planned closure on their customers’ banking and cash access needs and consider possible alternative access arrangements.
  • I am pleased that Post Office and UK Finance are working together to increase publicity of Post Office banking services and ensure more customers can benefit from them.

 

Further work is ongoing to prepare future legislation designed to protect access to cash, to ensure that the UK’s cash infrastructure is sustainable for the long term.