As hundreds of free cash machines and bank branches vanish from UK high streets, the government has today announced a new committee to ensure Britons remain able to access cash.
The government’s latest move is welcome news, following Which? findings that around 3,000 cash machines vanished in the last six months of 2018, while 1,700 free cash machines switched to charging a fee in the first three months of this year.
This comes in addition to Which? research finding that almost 3,000 bank and building society branches have closed, or are due to close, in just over four years.
Here, we explain what the new government committee will do to address the problem, and why we need to protect access to cash.
How is the government tackling the cash problem?
The government has committed to several initiatives to make sure cash continues to be available to those who need it.
New group to oversee the cash system
The new Joint Authorities Cash Strategy Group (JACS) will be chaired by the Treasury, and include the Payment Systems Regulator, the Financial Conduct Authority and the Bank of England. It aims to provide an oversight of the entire cash system in the UK.
Maintaining all current cash denominations
While the future of 1p and 2p coins has previously been in doubt, along with £50 notes, the Chancellor confirmed that all current coins and notes will continue to be used.
Safeguarding against counterfeit coins
The government plans to develop a new coin checking and validation system so that fake coins will be removed from circulation.
Improving cash distribution
The Bank of England will receive support in developing a new wholesale cash distribution system, making sure that cash will be distributed equally across the UK.
Why does access to cash matter?
Which? research has found that it is often the most vulnerable members of society who need cash most. Despite the increased popularity of digital payments, it’s estimated that around 2.2 million people are almost entirely reliant on cash in their day-to-day lives.
But Which? believes that removing cash as an option would be harmful for everyone. At least one major UK bank experiences an IT outage preventing payment processing every day, Which? previously found. High profile IT failures at Visa and TSB have shown how fragile electronic payment methods can be, and the need for a cash alternative.
That’s why Which? has been running a campaign to convince the government to intervene and appoint a regulator who can ensure that cashpoint funding – and wider access to cash – is planned and managed, and prioritises consumer interests.
The creation of a dedicated group to oversee the cash system is a positive move, but there’s more work to be done to ensure cash remains a viable option for everyone.
David Chaplin, head of campaigns at Which?, said: ‘Millions of people across the UK who rely on cash in their daily lives are currently at risk of being stripped of their ability to pay for essential goods and services – so the government’s unprecedented commitment to protecting cash should finally offer them some reassurance.
‘This new body must act urgently to address rapid changes to the cash landscape, as its success will be judged by how it ensures people can continue to access their preferred payment method in the face of bank branch closures and cashpoint closures, intermittent broadband access and regular IT glitches affecting digital payment methods.’
You can find out more about our ‘Freedom to pay. Our way’ campaign, and sign the petition calling for the government to ensure cash is protected. You can also share your views by joining the discussion at Which? Conversation.