We use cookies to allow us and selected partners to improve your experience and our advertising. By continuing to browse you consent to our use of cookies. You can understand more and change your cookies preferences here.


When you click on a retailer link on our site, we may earn affiliate commission to help fund our not-for-profit mission.Find out more.

7 Feb 2020

ATM changes save banks £120m, but cost customers £104m

Removal of free ATMs has saved banks millions of pounds, at a cost to customers

People are paying more to access their own money, even as banks make huge savings from cuts to free ATMs and branches.

Fees for withdrawing cash topped £104m last year, up £29m on 2018, according to data from Link, the national cash machine network.

But banks have saved millions of pounds in the past two years as 8,700 free cash machines have been axed and 1,203 branches closed.

This eye-watering increase in the cost to customers has been driven by changes to the way Link is funded and by customers being forced to use fee-charging ATMs.

Here we examine why free access to cash is under threat and what you can do about it.

Be more money savvy

Get a firmer grip on your finances with the expert tips in our Money newsletter – it's free weekly.

This newsletter delivers free money-related content, along with other information about Which? Group products and services. Unsubscribe whenever you want. Your data will be processed in accordance with our Privacy policy

Why consumers are paying more

Around 15,277 ATMs now charge fees - a quarter of all the cash machines in the UK.

These machines are also getting used more often, over 73 million times in 2019, 27 million more than the year before.

This is, in part, because for many people there's no alternative, due to the mass closure of free ATMs and bank branches.

Many ATM operators say they're forced to reduce the numbers of free ATMs because of a reduction in the interchange fee.

This is the money your bank pays the cash machine operator when you use a free cash machine.

The interchange fee used to be around 25p per transaction but went down to 22.5p between July 2018 and early 2019, undermining the business models of many independent cash machine operators.

Without Which? campaigning, the interchange fee would have gone down further still, to 20p per transaction.

Banks making hefty savings

Since 2018, the changes to ATM funding has saved banks £120m, according to figures shared with Which? by Link.

This comes on top of the many millions of pounds banks are expected to have saved with branch closures.

Below we show the impact of the funding changes to cash points brought in from January 2018.

The amount customers (shown by the blue line) have had to shell out has rocketed 39% from £75m to £104m while the bill to the banks (in red) dropped 17% from £686m to £564m.

UK Finance, the banking industry association, has insisted that banks understand the role of branches and decisions to close them are based on demand.

It added that customers can access everyday banking services at 11,500 Post Offices.

Deprived customers hit hardest

For some people, being charged £1 to withdraw cash is irritating. But for others, it's yet another drain on a stretched household budget.

A £1 charge for a £10 withdrawal equates to a 10% charge for an activity that would otherwise be free.

Which? research suggests that deprived communities are more reliant on fee-charging machines, and more likely to use cash on a day-to-day basis.

Between January 2018 and September 2019, 1,000 formerly free-to-use cash machines in the UK's most deprived areas started charging for use (6% of cash machines in these areas), compared with 237 (4%) in the most affluent areas.

Natalie Ceeney, who carried out a recent Access To Cash Review, said: 'The startling fact that a quarter of all ATMs now charge consumers to access their own money should worry us. It's a tax on the most vulnerable in society.'

Customers need protecting

Link chief executive John Howells said: 'People don't like paying to access their money and Link agrees with them.

'As people use less cash, many ATMs will become less economically viable, which means some ATMs will switch to charging.

'What's important is that we continue to have a broad, extensive UK-wide free-to-use network.

'Link is committed to ensuring that every UK high street has free cash access via ATMs and Post Offices. We are also keen on initiatives that will incentivise retailers to provide free cashback for consumers.'

Request a free local ATM

Link has a 'request an ATM' scheme enabling communities to ask for a cash dispenser directly.

Mr Howells said: 'We're delighted that, since launching in October, seven new ATMs have gone live, with nine in the coming weeks.'

Which? has developed a Request an ATM form that takes just three minutes to complete. At the time of writing more than 2,6000 had used it.

Which? campaign to change law

Which? wants the government to bring forward legislation to protect people's access to cash for as long as it is needed.

Gareth Shaw, head of money at Which?, said: 'Massive cuts to the UK's bank branch and cash machine networks have been highly lucrative for the big banks - but highly costly for millions of consumers.

'Entire communities have been cut off from cash or forced to pay hefty fees to access their own money.

'Banks must take greater responsibility for ensuring customers are supported to make the transition to digital if branches close, and that those who are reliant on cash are not left behind by changes to the banking landscape.