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What are your rights when your bank branch closes?

A notice on display in the window of a closed branch of NatWest, a popular British high street bank, informs the public of the reasons for its closure as the bank intends to shutter 32 of its branches permanently, with banks moving to focus investment on digital services on 11th March, 2022 in Leeds, United Kingdom. (photo by Daniel Harvey Gonzalez/In Pictures via Getty Images)
A third of all bank and building society branches closed between 2012 and 2021 leaving around 8,000 in the UK today. Photo: Daniel Harvey Gonzalez/In Pictures via Getty

Banks are disappearing from high streets around the UK, and in many cases, we’ve seen the doors close on the last bank in town.

For the 10% of people who rely completely on cash, and the fifth who still bank in person, the disappearance of a branch can cause real problems.

If a closure is on the cards, they can’t just slam the doors without a backwards glance, but unfortunately, you have very few rights.

The bank branch network has been slowly shrinking for decades, but we saw an acceleration around the time of the financial crisis, and then it hit a death spiral with the onset of the pandemic.

Between 2012 and 2021 we lost around a third of all bank and building society branches, and we’re left with around 8,000 in the UK today.

Read more: Is your pension safe?

Part of this is due to temporary closures during the pandemic, which meant more people started banking online. As a result, when branches reopened, they had fewer customers, so more reason to close for good.

Meanwhile, more people had got used to using cash less frequently. Cash was used for just 17% of transactions in 2020 thanks to COVID lockdowns. It meant there were fewer reasons to withdraw cash, which gave branches another reason to close.

But while online banking works brilliantly for millions of people, some see their local bank branch as a lifeline.

The Financial Conduct Authority (FCA) found that a fifth of us used a local branch in the past year — including two-in-five of the digitally excluded and more than a quarter of those in poor health or in financial difficulty.

LONDON, UNITED KINGDOM - JULY 28: A general view of HSBC bank teller machines and signage on July 28, 2016 in London, England. (Photo by John Keeble/Getty Images)
For vulnerable customers, their local bank branch could be a lifeline — an ATM can hardly offer hands-on help. Photo: John Keeble/Getty

Even those who are happy with a banking app and paying by card sometimes need access to cash or do things like pay in a cheque or talk to a human. When banks have been hit with technical problems in the past, branches have become vital.

The FCA has been working on how to protect people when a branch closes. It has been keeping an eye on things since 2020, and issued guidance this month.

It has given the banks some duties. If a bank wants to close your branch it has to look at the impact on its customers — including vulnerable people — and consider what alternatives it should put in place so they aren’t left high and dry.

Banks have to consult customers and alter their plans based on feedback. They have to make sure those alternatives are ready before they close — and give customers three months’ notice, so they have time to change banks if they want to.

The bad news is that this won’t put a stop to any closures, if there’s another bank nearby they’re likely to suggest people could switch banks, and if there’s a post office on the doorstep they could encourage people to use that for things like deposits and withdrawals.

Read more: What happens if you miss a bill?

If there’s nothing else, they may need to provide a mobile bank, set up a banking hub, open a new ATM or support customers with a switch to online banking.

Clearly, this won’t replace the services offered by your bank. An ATM can hardly offer hands-on help, while a Post Office can’t help you with any number of services — including opening or closing an account, making bank transfers or dealing with probate or power of attorney.

For customers with the mobility to go elsewhere and the online access and understanding to move online, this may be enough. But for more vulnerable customers, it’s another story entirely.

Their needs will need to be considered by banks before they close their branches, but they’re under no obligation to protect them. For most of us bank branch closures are a hassle, but for these groups of people, it can be a nightmare.

Watch: Why your bank statements might say buy-now-pay-later without you realising