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26 Apr 2022

Almost half of the UK's bank branches are gone – it's now or never to halt the cash crisis

Thousands of bank branches and ATMs have closed in just a few years and some areas have such bad provision they’re akin to cash deserts

Almost half of the UK's bank branches have closed since 2015, Which? analysis shows.

During this period, 4,685 bank branches have shut their doors, with a further 226 already scheduled to close by the end of the year.

Compounding the problem for the millions of people who still rely on cash is the deterioration of the UK’s ATM network - in particular free-to-use ATMs. Since 2018, the number of free-to-use ATMs has dropped by more than 12,000 - a reduction of almost a quarter.

Here we reveal the people and places most affected.

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Why cash still matters

Banks often point towards declining footfall and the rise of digital banking as justification for the closure of branches, but Link, which runs the majority of the UK’s cash machine network, estimates that as many as five million people still rely on cash.

There are plenty of reasons for this: cash can be a useful budgeting tool for households on low incomes, while people living in remote areas might not have reliable enough broadband or mobile connectivity for them to shift entirely to digital payments.

Cash is also important for many elderly people, who are more likely to visit bank branches in person.

Janice Bell, from Penarth in the Vale of Glamorgan, told Which?: 'Two banks in my local high street have closed recently and a third has just announced its closure. I struggled to get my Dad to use WhatsApp in lockdown, so the expectation that he can manage without a local bank and access to cash is totally unrealistic.'

Bank branches halved in seven years

Rural areas hit harder

Since 2015, the banking network in rural constituencies has been cut by half (50.7%), compared with 47.3% in urban areas. 

The effects of branch and ATM closures can be particularly severe in rural communities, where residents often have to travel for miles to reach their nearest alternative source of cash and where digital infrastructure can be poor, making it harder to embrace online banking and payments.

On average, rural constituencies have just 0.1 bank branches per 10sq km and 1.1 ATMs, compared with 2.6 branches per 10sq km in urban areas and 31.3 ATMs.

Cash-strapped communities

Which? identified 17 parliamentary constituencies that have particularly poor access to cash, which we’ve defined as three or fewer bank branches and 30 or fewer free-to-use ATMs.

Together these account for 1.5 million individuals, and range from rural areas where patchy public transport systems make the problem of dwindling cash access worse for an older than average population, to relatively deprived urban areas where residents struggling during a cost of living crisis might need to use cash for day-to-day budgeting.

Sheffield Hallam in South Yorkshire has the dubious claim to fame of being one of seven constituencies to see every one of its bank branches close.

A relatively large urban constituency, Sheffield Hallam has just 25 ATMs in total, seven of which charge a fee. With a population of almost 92,000, this means there are only 1.85 ATMs available per 10,000 residents. This is far lower than the average 8.4 ATMs per 10,000 people across all urban constituencies.

Of the 17 areas identified, Harrow East in London has seen the greatest reduction to its ATM network, losing almost 60% of its free-to-use cash machines since 2018. It now has just 17 free-to-use ATMs left, the joint lowest number of any constituency in the country (along with Orkney and Shetland).

Meanwhile, Carmarthen East and Dinefwr in Wales has had the highest number of branch closures of the identified constituencies, losing 13 of its 15 branches since 2015. This area is also notable for its high proportion of elderly residents, with individuals aged 65 and over making up 26.7% of its population. Across the UK as a whole, this figure is 18.6%.

Cash-strapped communities: bank branch and ATM network loss (%)  

Now or never to halt the cash crisis

While proposals to protect access to cash put forward by the banking industry, such as shared banking hubs, could play a role in preserving access to it, Which? believes they must be targeted and of sufficient scale to plug the gaps left by bank closures.

Ultimately these measures are voluntary and are therefore subject to change based on commercial decisions made by individual firms. At present, there is nothing to prevent banks from withdrawing from these measures at any point.

It has been almost two years since the government promised to protect access to cash. Which? believes legislation must be introduced in next month’s Queen’s Speech if the imminent collapse of the UK’s cash infrastructure is to be avoided.

Jenny Ross, Which? Money Editor, said: 'Our research highlights the devastating impact widespread bank branch and ATM closures have had on communities. With just two weeks to go until the Queen’s Speech, it really is now or never to halt the cash crisis. 

'Though banking industry proposals for action are welcome, what’s needed most is the legislation promised by the government to protect cash. This should also include making the FCA the key regulator to protect cash services.'