An average of more than 50 UK bank branches have closed each month since 2015 and campaigners fear some retailers could stop accepting cash if it becomes too burdensome to process. That said, under government rules, free withdrawals and deposits will need to be available within one mile for people living in urban areas. In rural areas, where there are concerns over “cash deserts”, where the maximum distance is three miles.
This is important because cash remains a necessity for millions of people, research has found, with the elderly and those with disabilities among those likely to struggle. Branches have been more likely to close in disadvantaged areas.
Of course, Banks have pointed to the large reduction in branch use – a trend accelerated by the Covid pandemic – and the popularity of managing money via smartphones, as good reason for diluting their branch network.
But a recent survey by Age UK suggested that, among those who were uncomfortable about digital banking, the key concerns were fraud and scams, a lack of trust in online banking services, and a lack of computer skills.
And now, The British Retail Consortium says cash use has grown for the first time in 10 years as shoppers keep a close eye on their budgets while prices rise, retailers have said. They said 19% of purchases were made with notes and coins last year, echoing a report by banks showing a slight rebound. That’s up from 15% the previous year. Until 2015, notes and coins were used in more than half of transactions and, while card use now dominated, cash still had its benefits. Consumers made smaller but more frequent payments, the survey found.
The consortium said consumers were budgeting carefully to try to cope with cost of living pressures, and there was also a “natural return” for cash after it slumped during the pandemic.
It is essential use of cash is protected, you cannot leave it to the market, where banks are making a killing from extra fees on card transaction costs as a result of removing access to cash.
