Yahoo Finance ATMs: FCA to mandate banks to ensure access to free cash withdrawal
Access to cash will be protected under new legislation set out by the government, benefiting millions of people as promised in the Queens Speech earlier this month.
The new powers will authorise the Financial Conduct Authority (FCA) to impose measures on Britain's banks and building societies to ensure the continued availability of withdrawal and deposit facilities in local communities across the country.
Measures will be legislated for in the upcoming Financial Services and Markets Bill, which will "protect consumers and enhance the UK’s position as a global leader in financial services", the Treasury said.
Under the new powers, the regulator can address cash access issues at both a national and local level.
It is thought that around 5.4 million adults rely on cash to a great extent or very great extent in their daily lives.
Read more: Lloyds and Halifax to close 28 more branches
"Millions of people across the UK still rely on cash, particularly those in vulnerable groups, and today we are delivering on our promise to ensure that access to cash is protected in communities across the country, said economic secretary John Glen.
"I want to make sure that people are still able to use cash as part of their daily lives, and it’s crucial to ensure that no person nor community across the UK is left behind as we embrace a more digital world."
A separate analysis revealed that the UK is facing an acute shortage of free-to-use ATMs, leaving consumers who rely on face-to-face banking services and cash to pay for everyday essentials at risk of being cut adrift.
According to the consumer group Which?, 4,685 bank branches have shut their doors, with a further 226 already scheduled to close by the end of this year, with 12,178 free-to-use ATMs axed.
Which? warned that elderly consumers, those aged 65 and over, who are most likely to reply on cash as a payment method, made up 23% of the population across the 17 areas with poor access to cash.
Read more: UK faces acute shortage of free-to-use ATMs, study warns
On Wednesday, Lloyd's Bank (LLOY.L) and Halifax announced they were shutting 28 branches, with 20 to go from Lloyds and 8 from Halifax as fewer customers were visiting branches.
"Branch visits have been falling significantly for several years now, and this trend is continuing," said Vim Maru, group retail director at Lloyds.
"The government plans to freeze us in our current position, and halt the ever-decreasing circle of access to cash, by setting out the maximum distance most people will have to travel to get their hands on notes and coins," Sarah Coles, senior personal finance analyst at Hargreaves Lansdown said.
"This doesn’t mean a halt to bank branch closures, but it will mean that in some cases, when a branch closes, access to cash will need to be maintained another way."
Watch: The pros and cons of central bank digital currencies
