Banks may be forced to ensure customers have access to cash in a crucial move for those who still rely on cash, such as the elderly. Proposed new legislation aims to grant the banking regulator greater powers to ensure that High Street branches continue to offer free cash withdrawal and deposit services.
This development is crucial for millions of elderly, vulnerable, and isolated individuals who rely on cash for their day-to-day transactions.
Additionally, it provides a significant boost to the Daily Express's Save Our High Street Banks campaign.
Industry analysts widely predict that in-person banking will cease to exist by 2027, as there has been a substantial increase in bank branch closures due to customers shifting towards online financial management.
In response to these trends, Ministers intervened to amend the Financial Services and Markets Bill, currently progressing through parliament, in order to grant the Financial Conduct Authority (FCA) greater power to act.
The bill already includes important provisions aimed at safeguarding access to cash withdrawal and deposit facilities.
Economic Secretary to the Treasury, Andrew Griffith said: "The convenience and speed of digital payments opens a world of opportunity for people and businesses, but the reality is that for the foreseeable future many still depend upon the ability to withdraw or deposit cash.
"That is why we are bringing forward new laws that will ensure everyone has reasonable access to be able to withdraw and deposit cash for free. This is especially important for those living in rural communities, the elderly and households who rely upon physical cash to manage their finances."
Campaigners have repeatedly advocated for the preservation of high street branches, as analysts issue warnings that nearly all of them could be closed within the next four years.
Data reveals a consistent decline in the number of branches operated by the Big Six banks, namely Lloyds, NatWest, Barclays, HSBC, TSB, and RBS, each year since 2015.
According to tracking data from the consumer group Which?, a total of 5,391 branches have been shut down by banks and building societies between January 2015 and the same month this year.
The closure trend has already left hundreds of towns without a bank, and cash machines are also disappearing at an alarming rate.
Recent examples of towns and cities where branches have recently closed include Marlow in Buckinghamshire, Saxmundham in Suffolk, Bromley in South-east London, Haslemere in Surrey, and Aberdeen.
Caroline Abrahams, Charity Director at Age UK, welcomed the new change, saying: "Today's amendment is very welcome and will help give many cash-reliant older people the confidence to get hold of the money they need.
"Maintaining access to cash and banking services in local communities, especially in rural areas, is extremely important for many older people and we welcome the intention of giving the FCA more power, so they can ensure free access to cash is there for all.
"Many older people view cash as the most reliable and straightforward way to pay for goods and services, as well as an effective means of managing their weekly budget when money is extremely tight, as is often the case at present.
"For others, having notes and coins in their purse or wallet helps them to stay independent and retain firm control of their finances, while also lowering their risk of being defrauded, something that many fear and with justification."
Dennis Reed, director of Silver Voices, said the move was a welcome "first step".
"It's an excellent first step to save cash which is essential for millions of older people around the country who rely on it," he said.
"There are too many cash deserts and that makes life extremely difficult for the many people who don't use digital banking."
Mr Reed said he would like the Government to take a similar approach to service providers and public bodies.
Rocio Concha, Which? Director of Policy and Advocacy, said: "Whether it's to buy everyday essentials or to keep track of spending during the cost of living crisis, cash is hugely important for millions of consumers.
"With bank branches and ATMs continuing to close at rapid rates, those who are not yet ready or able to make the switch to digital payments can't be left behind.
"Which? has campaigned tirelessly to ensure that new laws protect free access to cash - and we are delighted that the Government agrees that people should not have to pay fees just to access their own money."
Next month, the Financial Services and Markets Bill will proceed through the House of Lords as it continues its legislative journey in parliament.
A UK Finance spokesperson said: "While cash use has declined, it remains a common payment method. The banking and finance industry is committed to ensuring there is continued access to cash for those who need it, when they need it.
"This is being delivered in a range of ways, including shared bank hubs, free ATMs and cashback without purchase. We support the access to cash provisions in the Bill and look forward to continuing to work with the Government and FCA to help customers with their cash needs."2023-05-25T20:08:43Z dg43tfdfdgfd