People on low incomes and older generations will be hardest hit by bank and ATM closures because they use cash more frequently than other customers, research released by consumer group Which? today reveals.
Research by Which? shows that over three-quarters (78 per cent) of consumers in the two lowest household groups rely on cash the most – using it at least two or three times a week - and are less likely than average to use a card.
Just over a quarter (26 per cent) of the poorest off never use card payments. Among older generations, considered one of the most at risk of social exclusion when bank branches and cash points disappear, four in five retirees (80 per cent) rely on cash.
The consumer body is calling for the Payment Systems Regulator (PSR), the economic regulator for the £81 trillion payment system in the UK, to urgently step in to review the Financial Inclusion Programme and push LINK (the network coordinator) to publish details. It also wants the government to place a statutory duty on the PSR to monitor and protect access to cash, and the regulator needs to conduct a review of competition in the payment sector.
Recent research shows cash machines are shutting at a rate of 250 a month, with campaigners saying this highlights the failure of LINK’s Financial Inclusion Programme that promised to protect access to cash.
More than 2.2 million people rely on cash in the UK.
Gareth Shaw, Which? money expert, said that urgent action was needed to protect access to cash.
“Widespread ATM and branch closures are threatening to leave behind the millions who still rely on cash and our research highlights lower income families and older generations will be among the worst hit. Clearly, LINK’s commitment to protect access to cash in vulnerable communities is failing.
Mr Shaw added: “It is critical the regulator now intervenes to ensure consumers are not at risk of financial exclusion. The government must give the PSR additional powers to effectively protect access to cash.”
Ged Killen, Labour (Co-op) MP for Rutherglen and Hamilton West, who has introduced a private member’s bill to ban ATM charges said: “Closures of free-to-use ATMs penalise the poor and the elderly.
“Both the regulator (the PSR) and the membership body LINK were repeatedly warned by consumer groups, ATM providers and public representatives of the consequences of the free-to-use ATM closure program.