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11 Mar 2020

Budget 2020: Government commits to protecting access to cash

Legislation will be introduced to protect cash for the millions who rely on it

The government has today confirmed measures to preserve access to cash that will help protect the millions of people across the UK who still rely on notes and coins.

Which? has been campaigning to protect cash access since 2017 and recently raised the alarm that the UK's cash system was on the brink of collapse.

Thousands of people across the UK joined Which? in calling on the Treasury to act, culminating in Which? CEO Anabel Hoult visiting Downing Street to leave a briefcase filled with their stories for the Chancellor to consider.

Here, we look at what has been announced, and how it will make a difference to the millions of people who need cash in their everyday lives.

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What has the government announced?

Two million people in the UK rely on cash every day - this includes many vulnerable groups across the country.

The government has now committed to introducing new laws to make sure that everyone who needs cash can continue to access it. Which? has long argued that a change in the law is the only way to protect cash.

The Treasury will begin talks with industry and regulators - including the Bank of England, the Financial Conduct Authority (FCA) and Payment Systems Regulator - immediately after the Budget.

Discussions will cover how these groups can work together to ensure customers' payment needs are met. Ideas being floated are:

  • granting watchdogs new powers to ensure banks continue to support their customers' cash needs properly.
  • creating a new system for moving money around the UK to keep cash accessible.

This action will build on the government's previous efforts to protect cash, including investing in the Post Office to provide everyday banking services, setting up the Payments Systems Regulator to watch over the LINK ATM network and setting up the Joint Authorities Cash Strategy (JACS) group to ensure oversight of the UK cash system.

Anabel Hoult, Which? CEO, said: 'We are pleased that the chancellor has taken decisive action today to ensure that millions of people who have been hit hard by bank branch and ATM closures will continue to have access to cash.

'We know that the cash system faces irreversible damage within the next two years, so the government must swiftly press ahead with its plans to legislate, which must include putting a single regulator in charge of protecting cash.

'It is vital that this commitment is quickly turned into action. We look forward to working with the government, regulators and industry to ensure that cash is protected for as long as it is needed.'

Listen:The Which? Money Podcast explores bank branch closures and interviews an MP whose constituency has no bank branches:

Sweden has led the way

The Treasury will follow the example of international efforts to save cash, including those within Sweden.

A recent Which? investigation highlighted the campaign to save cash in Sweden, a country which has been called the most cashless nation in the world.

Sweden has recently passed legislation requiring large banks to provide customers with facilities for making cash withdrawals.

Read our story on the fight to save cash in Sweden, and listen to interviews with key Swedish cash campaigners on an episode of The Which? Money Podcast below.

Why urgent action is needed

Which? welcomes the Chancellor's announcement, as our research has revealed just how desperately the UK's cash network needs legal protections.

More than 3,500 bank branches have closed since 2015 at a rate of around 55 a month. Scotland lost one third of its bank branches in just eight years.

We've explored how cash machine closures can be hugely detrimental to people with disabilities, including award-winning blogger Gem Turner who worries she'll lose her independence.

We also visited smaller communities, like the Welsh town of Harlech, that have been left with no free ATMs whatsoever.

Further Which? research has highlighted the fragility of the nation's digital payments network.

Glitches in banks' IT systems could leave two thirds of people unable to make payments, suggesting we're sleepwalking into a cashless society our banks just aren't ready to support.

The 2020 Budget will get the ball rolling on protecting cash for the millions of people who need it for years to come.