Millions of people in communities across the UK will see their ability to access cash protected by new powers set out by the Government.
Under the new rules, the financial regulator – the Financial Conduct Authority (FCA) – will be granted new powers over the UK’s largest banks and building societies, to ensure that cash withdrawal and deposit facilities are available in communities across the country.
The FCA’s new powers will allow it to address cash access issues at both a national and local level. To support the FCA, the government will in due course set out its expectations for a reasonable distance for people to travel when depositing and withdrawing cash. This will reflect the existing spread of cash withdrawal and deposit facilities in the UK.
Cash is the second most frequently used method of payment in the UK, and around 5.4 million adults rely on cash to a very great or great extent in their daily lives – further emphasising the importance of this legislation and new FCA powers.
The government passed legislation to enable the widespread adoption of cashback without a purchase as part of the Financial Services Act 2021, which was possible as a result of the UK’s departure from the European Union.
Last month the government announced its intention to legislate to provide the Bank of England with the powers necessary to ensure the UK’s wholesale cash infrastructure – which includes the network of cash centres integral to the sorting, storing and distribution of notes and coin – remains effective, resilient, and sustainable, and continues to support access to cash across the UK. Taken together, these measures will ensure that the UK’s cash infrastructure is viable for the long term.
These powers 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.
Economic Secretary John Glen, who will be visiting Scotland on Thursday, said “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. 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.”
Rocio Concha, Which? Director of Policy and Advocacy, said “Cash remains a vital lifeline for millions of people – whether to pay for everyday essentials or to help keep track of spending amid the soaring cost of living, so it’s good to see the government taking action and giving the FCA powers to protect them.”
“The sheer scale of cuts to the UK’s ATM and bank branch networks in recent years has seriously eroded access to cash for consumers and communities around the country.”
“The Treasury’s proposal to base reasonable access to cash on geographical distances is a decent starting point, but this can often be a blunt tool, so the FCA must fully consider a wide range of factors when determining a local community’s access to cash needs.”