The number of bank branches in Britain shrank by another 5% in the spring after more than 250 were axed as the pandemic accelerated closures, new figures from the City watchdog have revealed.
The closures meant less than two-thirds of the UK population (60.1%) are now within 2km of a bank branch, down from 61.8% in the first quarter of 2021.
It also saw a drop in the proportion of those within 5km of a branch, down to 87.5% from 88% in the previous three months.
Lenders such as Virgin Money and HSBC have recently shut branches as the Covid crisis has ramped up the shift towards online banking, with Lloyds Banking Group, Sabadell-owned TSB and the Co-operative Bank also among those to shut branches since the start of the pandemic.
The FCA said that, with post offices, ATMs and mobile banks thrown in, there are 60,227 places offering free access to cash across the UK, which is up from 59,903 quarter on quarter.
But the figures have been flattered by the number of bank branches and ATMs that reopened after being temporarily shut in the lockdown at the start of 2021.
Our latest data on cash coverage in the UK shows that over 95% of people are within 2km of a cash access point such as a bank, Post Office branch or ATM (99.7% are within 5k). #FCAData
See the full analysis https://t.co/EwwUgytCuw
— Financial Conduct Authority (@TheFCA) November 9, 2021
The FCA said that, while 95.5% of Britons are within 2km of a free cash access point, up from 95.4% the previous quarter, only 77.3% of those in rural areas are within 2km of free access to cash.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “Bank branch closures risk cutting the most vulnerable people off from their cash.
“Almost two in five of us now live more than 2km from a bank branch, and goodness knows how far from the bank where we actually hold our account.
There’s a real risk to those who are less mobile and need help from a human when getting hold of their money
Sarah Coles, Hargreaves Lansdown
“And while the vast majority of us can still access cash without a charge, without travelling more than 2km, there’s a real risk to those who are less mobile and need help from a human when getting hold of their money.”
She added that 2km may be too far for many vulnerable customers.
“Many of the five million people who rely on cash are older and have mobility issues,” she said.
“If they don’t have access to transport, 2km may as well be 20km.”