Access to cash will be protected under measures outlined in the Queen’s Speech, the government has promised.
The Financial Services and Markets Bill comes as concerns grow that some areas – particularly rural or deprived areas – could become “cash deserts” as bank branches shut down or reduce opening hours.
It is thought that around 5.4 million adults rely on cash to a great extent or very great extent in their daily lives.
For many people, using cash helps them to budget – Consumer group Which? found that 52% of regular cash users said it helps them keep track of their spending and 20% who do not use cash regularly said they would start if the cost of living crisis worsened.
But Which? also found last week that 4,685 bank branches have closed since 2015 and 12,178 free-to-use ATMs have been axed since 2018.
John Howells, chief executive of ATM network Link, said: “We strongly welcome today’s news and are pleased that the government recognises that protecting access to cash is vital.
“We know that consumers are becoming increasingly digital and using alternatives to cash, but there are still 10 million people who rely on cash.
“A great deal of progress has been achieved by the banking industry over the past couple of years, in which Link has played a critical role.
“This is good news for any community in the future as we continue to protect access to cash services and we look forward to seeing the details of the bill in due course.”
Natalie Ceeney, chair of Access to Cash Review and Cash Action Group, said: “Today’s announcement to legislate to protect cash is a huge step forward.
“I applaud the government for this commitment to supporting some of the most vulnerable people in society, as well as small businesses.
“A lot of great work has been done over the past couple of years by the banking industry and with this legislation, we can shift the conversation from whether we can protect cash to how we can best meet the needs of those who need it.”
Philip Bowcock, chief executive of ATM provider NoteMachine, said: “The way ATMs are funded must be addressed as part of the legislation to ensure a long-term future for the free-to-use cash network.
“The focus on geographic requirements within the access to cash legislation must also be properly thought through – setting an ‘as the crow flies’ radius will make no real difference to consumers unless ease of accessibility is the primary consideration.”