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Access to Cash

Updated: Nov 3, 2021

According to Financial Conduct Authority (FCA) research, 1 in 6 adults found it harder to make payments during the pandemic. This was due to several factors including bank and building society branch closures, travel restrictions and retailers accepting card-only payments.

As restrictions continue to lift has it become easier for people to access and pay with cash, or is this still an issue?

Proximity to an ATM Cash Machine

Within the UK, 95.6% of the population lives within 2km of an ATM. Of these, 85% are free to use.

For people who cannot visit a bank, building society or post office during opening hours or those in remote communities, ATMs are vital.

ATMs can also be easier to access for people with disabilities. This may be due to only 63% of larger banks and building societies and 55% of other branches being wheelchair accessible, having step-free access, and having a hearing/induction loop.

The ability to withdraw money from an ATM is something we all take for granted, but is it under threat? If we move towards a cashless society, is there a risk that ATMs become surplus to requirements for the majority? If they are removed, what is the option for people who still need or want access to cash?

LINK manages the UK network of ATMs and they have a policy of protecting access to cash in rural, remote and deprived areas. In addition, the Post Office has to provide statutory coverage in branches. Mobile banking services also help to maintain facilities in remote regions.

Do Contactless Payments Remove the Need for Access to Cash?

One measure introduced during lockdown was an increase in the contactless payment threshold. The maximum limit rose from £30 to £45 in April 2020 and it may go up again. For many consumers, this is helpful, but how does this impact on financial management?

For some, contactless payments put them at higher risk of spending beyond their means and getting into debt. No pin payments can make us more susceptible to fraud. For some people, this cements their view that cash is better than contactless.

What Does the Data Tell Us About Access to Cash?

Whilst the shift towards digital payments was fast-tracked by social distancing, is this path towards a cashless society a good thing? Do digital transactions make purchases easier or is there a risk that going cashless could put people at risk of harm?

Although there has been a significant decline in cash use, 10% of the population still use cash for the majority of their purchases. The reasons for a preference for cash include:

· Reduced risk of overspending

· Distrust of alternative payment options

· Lack of digital confidence or access to digital payment options

· Preference, particularly for small/informal payments

· Habit

· Reliant on others to shop on their behalf

In 2018, the Access to Cash Review identified that the desire to pay with cash was particularly important to individuals aged 65+ and low-income households. There were also regional differences, with those in the North East of England most likely to pay cash.

The findings of the review suggested that the UK was not ready to go cashless. However, as it becomes easier for businesses to accept and process digital payments, there were fewer incentives to handle notes and coins. This could put some people at risk of harm.

The Risks of a Cashless Society

As a cashless society draws closer, society risks leaving people behind. The Access to Cash Review concluded that moves towards a cashless society will cause around 17% of the population (8 million adults) to struggle.

These individuals are already likely to be dealing with situations that make them more vulnerable. If access to cash and the option of cash payments were removed, it would put them at a greater risk of isolation, exploitation, debt and rising costs.

The Access to Cash Review encourages a revised infrastructure that makes it viable for cash payments to be accepted and processed. Will your organisation champion inclusivity and champion consumer choice?

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