Bank branch closures threaten access to cash

New analysis shows that one in eight bank branches in the UK will close by the end of the year, raising fears that the government's access to cash promises may be broken

Millions of people in the UK use the folding stuff, but the trend away from cash following the coronavirus pandemic is speeding the closure of bank branches and autotellers in high streets. PA

New figures show that more than one in eight bank branches in the UK that were open in January will be closed by the end of the year.

Analysis by the Financial Times, based on data from the ATM provider Link, shows that 636 branches are earmarked to shut by the end of 2023, with 424 of those already closed.

At the end of last month, Barclays added another 15 branches to its 2023 closure plans, bringing its total anticipated closures to 180. That figure though could increase before December.

Last year, Barclays closed 184 branches. Only Lloyds Banking Group, which includes Bank of Scotland, Halifax and Lloyds Bank, closed more – 186 branches in 2022.

Which? estimates that after this year’s closures, there will be little more than 4,000 branches left across the UK, where 5,600 have closed since January 2015, when the consumer group began tracking the figures.

The banks have been closing branches for years, but the process considerably accelerated during the coronavirus pandemic and with the increase of digital transactions.

The speed of the branch closures in recent years has been mitigated to some degree by certain actions by the banks themselves, including the introduction of mobile branches, ad hoc in-person services in some public buildings such as town halls and libraries, banking pods which are semi-permanent structures in shopping centres and the provision of some services by certain banks at post offices.

Postmaster Mark Eldridge, right, with publican Mark Dobby of The Dabbling Duck in the rural village of Great Massingham, Norfolk. As UK bank branches close, many people and businesses are turning to the Post Office for their everyday banking services. PA

'Shouldn’t have to trek for hours'

But the closures have raised concerns that many people have a diminishing ability to access cash.

The government addressed the problem last month, with a framework document that aims to ensure that the majority of people and businesses would have to travel no more than three miles to access cash free of charge.

“While the country is moving further away from using coins and notes with the number of online payments rising from 45 per cent to 85 per cent in the past 10 years, cash can still be an integral part of many businesses and people’s lives,” the Treasury said.

The Financial Conduct Authority (FCA) can hold banks and building societies to the new rules, and has the power to fine them if they do not.

“People shouldn’t have to trek for hours to withdraw a tenner to put in someone’s birthday card – nor should businesses have to travel large distances to deposit cash takings.” said Andrew Griffith, Economic Secretary to the Treasury.

“We are taking action to protect access to cash in law and laying out that this means fee-free withdrawals and the availability of cash facilities within a reasonable distance.

“These are measures which benefit everyone who uses cash but particularly those living in rural areas, the elderly and those with disabilities,” he said.

Some banks have signed up to the cashback without purchase initiative, which means bank customers can get cash at the till of their local grocery store, without needing to make a purchase or pay a fee.

Cash, which is estimated to be used by 5.4 million adults in the UK, still plays a significant role in the economy.

Figures from the Nationwide Building Society show the use of cash may be increasing. There were 30.2 million cash withdrawals from Nationwide autotellers last year, a 19 per cent increase on 2021.