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Access to cash to be protected under new law, as announced in the Queen's Speech

The bill will also ensure more help for scam victims, following a Which? campaign
Prince Charles during State opening of Parliament
Prince Charles during State opening of Parliament

Plans are underway to ensure access to cash in the UK is effectively protected, following the government's commitment to new legislation.

During the Queen's Speech, the government pledged to bring forward a Financial Services and Markets Bill following a longstanding campaign on cash access from Which?.

The bill will also introduce additional protections for those investing and using financial products, as well as introducing better protection for scam victims who are tricked into transferring money to a fraudster. 

The speech, which was read by the Prince of Wales for the first time today (Tuesday 10 May) on behalf of the Queen, forms part of the State Opening of Parliament and provides the Government with an opportunity to highlight its priorities for the year ahead. 

Here, Which? explains what the legislation means for cash users, and what else is being done to protect it. 

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What was announced during the Queen's Speech?

The Financial Services and Markets Bill aims to 'strengthen the United Kingdom's financial services industry, ensuring that it continues to act in the interest of all people and communities'. 

Part of this includes making sure people across the UK can access their own cash with ease. 

The government acknowledged that cash remains an important payment method for millions of people - particularly vulnerable groups. In fact, cash is the second most frequently-used method of payment in the UK, used by 5.4 million adults.

Recent Which? research suggests people's reliance on cash could be on the rise due to the cost of living crisis; with households turning to cash to keep track of their spending.

Protections for scam victims

The bill also includes measures to better protect scam victims, by making sure they are reimbursed if they are tricked into transferring money to a fraudster. 

Which? has been campaigning for the government to stamp out scams since 2015; and in January this year, we reiterated our call for stronger protections for fraud victims after finding more than £700,000 is lost to bank transfer scams every day. 

Currently, many banks have signed up to a voluntary reimbursement code, but victims of bank transfer scams face a lottery depending who they bank with, with concerns about it being applied inconsistently. 

However, under the new bill, the Payment Systems Regulator (PSR) can force banks reimburse authorised push payments (APP) scam losses. 

The bill is also set to cover: 

  • revoking retained EU law on financial services, and replacing it with an approach to regulation designed for the UK
  • updating the objectives of the financial services regulators with a greater focus on growth and international competitiveness 
  • reforming the rules that regulate the UK's capital markets to promote investment.

When will the bill come into force?

No timeframe has been announced yet. This will depend on a host of factors, such as how quickly the Bill is published, and how straightforward its Parliamentary passage is. 

More details will be set out when the Bill is formally introduced. 

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Why is cash legislation needed?

Almost half of the UK’s bank branch network has closed since 2015, Which? analysis shows. 

In addition, a total of 12,178 free-to-use ATMs have vanished since 2018, creating areas of the UK with particularly poor access to cash.

However, Link, the UK’s largest cash machine network, estimates 5.4m people still rely on cash.

Cash can be a lifeline to some of society's most vulnerable groups, including some of those who are elderly, digitally excluded, on low incomes and rely on cash to budget, struggling with mental illness or physical disability.

Which? has been tracking bank branch closures since 2015, and during this period 4,685 have shut their doors, with a further 226 already scheduled to close by the end of the year. 

What else is being done to protect access to cash?

In December, the Cash Action Group (CAG) which is made up of eight major banks, as well as groups such as Age UK and the Post Office announced a raft of measures to maintain access to cash. 

Any community facing the closure of a core cash service, such as a bank branch or ATM, will trigger an independent review by Link - the UK's main ATM operator.  

Link will determine whether a new solution should be provided and will have the power to commission services such as a shared banking hub or better Post Office services to meet the cash needs of the community as a whole - not just the customers of one bank or building society. 

It's also now possible to get cashback without purchase at 2,000 shops across the UK.

However, these actions are voluntary and there is nothing to prevent them being withdrawn at any point, which is why Which? has campaigned for legislation to be introduced urgently. 

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Which? welcomes the bill 

Anabel Hoult, Which? Chief Executive, said: 'Which? has fought for years on behalf of millions of people and whole communities that rely on cash, so we welcome the government's commitment to introduce legislation this year to protect access to cash for as long as it is needed. 

'While the pandemic has accelerated the move to digital payments for many consumers, many are not yet ready to make that switch and require protection from an avalanche of ATM and bank branch closures that have left the UK's cash system at risk of collapse. 

'This legislation must ensure that clear requirements are placed on industry to meet communities' need for cash and that the FCA is given powers to monitor and enforce these as soon as possible.'

What else was announced in the Queen's Speech?

The Queen's Speech featured 38 bills or draft bills, including some that had been carried over from the last parliamentary session.

Other bills that could impact consumers include a Draft Digital Markets, Consumer and Competition Bill, which will promote competition, strengthen consumer rights and protect households and legislation to protect renters and tenants' rights. 

Here is a short summary some of the bills: 

Greater protection for consumers and powers to the CMA

The Draft Digital Markets, Consumer and Competition Bill will tackle fake reviews, and prevent businesses snaring people in 'subscription traps' where tempting introductory deals are followed by expensive contracts that are difficult to cancel. 

The legislation would make it illegal to commission someone to write a fake review, or to offer to write one, and also prohibiting the hosting of fake reviews without taking steps to ensure they are genuine.

Government proposals would see businesses being fined up to 10% of their global annual turnover for breaking consumer laws, or £300,000 for an individual - without the Competition and Markets Authority (CMA) needing to take them to court. 

Clamp down on money laundering

The Economic Crime and Corporate Transparency Bill aims to clamp down on money laundering, and create powers to more quickly and easily seize and recover cryptoassets, which may be used in ransomware payments. 

Protecting renters

A Renters Reform Bill will seek to abolish 'no fault' evictions by removing Section 21 of the Housing Act 1988, while also reforming possession grounds for landlords, and strengthening them for repeated cases of rent arrears. 

Tenants' rights

A Social Housing Regulation Bill will look to improve tenants’ rights to better homes in the wake of the Grenfell Tower disaster, with increased powers for the regulator.