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Poorer areas hit hardest by the loss of free cash machines

1,500 more ATMs are set to start charging fees

One in 10 of Britain’s free-to-use cash machines has either closed or started charging a fee over the past 17 months, with the poorest communities hit hardest.

New research from Which? looked at where free-to-use cash machines are being lost, finding that the most deprived areas were losing access to their cash from ATMs at a faster rate.

The news follows an earlier warning from network operator NoteMachine that as many as 4000 free-to-use ATMs could switch to charging fees, with our analysis showing this could mean fees being introduced on 1,500 free-to-use machines in poorer areas.

Here we explain why deprived communities are adversely affected, and what can be done about it.


Where are the most cash machines closing?

Since January 2018, almost 8,700 free-to-use cash machines in the UK have closed or started charging fees.

Of the ATMs that closed, 223 were in the wealthiest areas, which equates to 3.9% of the local cash machine network.

The most deprived areas not only lost more machines – 979 – but also lost a higher proportion of their network, with 5.7% of machines closing.

You can find out how many free-to-use ATMs your region lost using our map:

We measured wealth and deprivation based on the Indices of Multiple Deprivation, which take into account factors such as income, education, crime, housing and services.

Poorer neighbourhoods could end up losing 15% of their free cash machines if NoteMachine carries out its plan to start charging fees on thousands of its machines, Which? analysis indicates.

“It comes as no surprise that deprived areas are losing free cash machines at a faster rate than affluent ones”, NoteMachine told Which?. “We have argued for years that the changes to the way the ATM network is funded would lead to a loss in free access to cash for deprived areas.”

NoteMachine also pointed to the impact of banks reducing cash supply through closing ATMs, fewer branches and changes to Link pricing.

“Combined, this is having a profound impact on retailers who are suffering from yet more depleted high streets, will lead to an increase in household debt for vulnerable people, and will mean another hammer blow to the economy.”

The problem with fee-charging ATMs

To withdraw money from a fee-charging cash machine, you typically have to pay £1, although charges are as high as £2.

If you frequently withdraw small sums, these charges can add up. For a £10 withdrawal, a £1 fee is the equivalent of paying 10% to access your own money.

People in more deprived areas are more likely to rely on cash day-to-day, Which? has found. Indeed, 78% of people in the two lowest household income groups use cash at least two or three times a week. Just over a quarter (26%) never use card payments.

This means those least able to pay for withdrawing cash are also more likely to have a fee-charging machine in their local area.

  • Find out more: find a free cash machine near you

Where is worst affected?

In some areas, paying to access your own money is becoming a fact of life.

Almost half of cash machines in Great Yarmouth now charge a fee, far above the national average of 20%.

The proportion of fee-charging machines has also shot up in Vauxhall in London, Birmingham Hodge Hill and in Nuneaton.

You can see the constituencies with the highest proportion of fee-charging ATMs below.

Government needs to take action

In March this year, the Access to Cash Review warned that the disappearance of cash machines and limited acceptance of cash by retailers could harm vulnerable communities.

There have been encouraging developments since then, with Link, the national cash machine network, vowing to fund cash machines on all qualifying high streets.

However, this hasn’t fully offset the switch to fee-charging machines in deprived neighbourhoods.

Which? has called on Sajid Javid, the Chancellor of the Exchequer, to introduce a minimum service guarantee that cash will be accessible and accepted as payment for essential goods and services.

Jenny Ross, Which? Money Editor, said: ‘We know that people in more deprived communities tend to rely heavily on cash, so it’s deeply concerning that those who can least afford it are being hit with the extra burden of hefty fees to access their own money as free cashpoints close at an alarming rate.

‘The government and regulators must urgently get a grip on these rapid changes to the cash landscape and guarantee people across the UK can continue to access this important payment method for as long as it is required.’

You can support our efforts to protect cash by signing up to our Freedom to Pay campaign.

Editor’s note: this article has been changed to include a comment by NoteMachine.

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