Access to Cash and Banking - April 2022

Dear Constituent,

Thank you for contacting me about access to banking.

I understand that bank branches are vital for many people, and we must preserve access to banking for local communities across our country. I share your concerns regarding the impact that closures of branches could have, particularly in rural areas such as ours. It should be highlighted that decisions on the opening or closing of individual bank branches are taken by each bank on a commercial basis, without intervention from the Government.

It is vital that all customers, wherever they live, can still access over-the-counter services. The Government is supporting the Post Office’s relationship with the banks. An agreement enables 99 per cent of banks’ personal customers, and 95 per cent of banks’ business customers, to withdraw cash, deposit cash and cheques, and make balance enquiries at a Post Office counter across a network of 11,500 branches. I am pleased that Post Office and UK Finance are working together to increase publicity of Post Office banking services and ensure more customers can benefit from them.

I welcome that, in September 2020, the FCA published guidance setting out expectation that firms should consider the impact of branch and ATM closures on their customers’ everyday banking needs and consider the availability and provision of alternatives.

The industry’s Access to Banking Standard, which commits banks to ensure personal and business customers are better informed about branch closures and the reasons for closing them, must be followed. The standard also helps customers to understand the options they have locally to continue to access banking services.

I welcomed the announcement in July 2020 of the establishment of a Joint Authorities Cash Strategy (JACS) Group which brings together representatives of our key financial regulators to provide joined-up and comprehensive oversight of the UK's cash infrastructure. The JACS Group places a particular emphasis on user needs and the changing nature of cash usage.

I strongly welcome that the Government also legislated in the Financial Services Act 2021 to facilitate the wide-spread adoption of cashback without a purchase. Further work is ongoing to prepare future legislation designed to protect access to cash and ensuring that the UK’s cash infrastructure is sustainable for the long term but as I have indicated above, the Post Office network provides access to cash for 99% of bank personal customers and as of October 2021, LINK reported that there were around 41,000 free-to-use ATMs in the UK. More broadly, the Financial Conduct Authority reports that as of the second quarter of 2021, nearly 96 per cent of the UK population are within 2km of a free-to-use cash access point.

I have also been encouraged to see the Government update its proposals to see cashback offered at shops without consumers having to make a purchase in addition to the Financial Conduct Authority made ultimately responsible for ensuring the cash system works for consumers and businesses.

Finally, from 1 July to 23 September last year, the Government held the Access to Cash Consultation on further proposals for new laws to make sure people only need to travel a reasonable distance to pay in or take out cash. The Government’s proposals intend to support the continued use of cash in people’s daily lives and help to enable local businesses to continue accepting cash by ensuring they can access deposit facilities. The Government received responses to the consultation from a broad range of respondents, including individuals, businesses, and charities. The Government has carefully considered responses to the consultation and will set out next steps in due course.

Thank you again for taking the time to contact me.


Richard Fuller