Martin Lewis warns of ‘risk’ of a cashless society
Nearly a quarter of free-to-use cash machines have gone out of service since 2018, according to consumer company Which?. Nearly half of bank branches are also reported to have been earmarked for closure since 2015.
The recent national lockdowns moved the country further away from regular cash use, with some companies opting to accept card payments only, citing fears of Covid transmission.
But campaigners have warned moving away from cash being readily available risks many Britons “being cut adrift”.
Which? this week wrote to the Treasury, highlighting: “With rising living costs placing additional pressure on people’s personal finances, the consequences of being unable to withdraw cash for those consumers who already rely on it could be significant.”
It added: “Unless legislation is introduced urgently, the ability to access, spend and deposit cash could be permanently lost for many consumers, leaving some of society’s most disadvantaged at risk of financial exclusion with no way to pay for the goods and services they need in their daily lives.”
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Andrew Rosindell MP believes becoming a cashless society would be a “grave mistake”.
The Conservative MP for Romford insisted it is “paramount” Britons continue to be able to easily access cash, describing this as “a cause worth fighting for”.
Mr Rosindell told Express.co.uk: “By moving solely to digital currency and online banking, it discriminates against older people and is often more difficult for families on the lowest incomes to budget effectively.
“Not only that, we cannot and should not rely on technology being responsible for our day to day lives, especially when it comes to our money.
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Out of order ATM.
“Many of us like knowing where our money is and being able to physically touch it.”
Mr Rosindell added the campaign for cash was about more than helping elderly consumers, not that this was a worthless cause.
He stressed: “The potential of more identity related fraud also opens up too, as it exposes your personal information to a possible data breach which could be catastrophic.”
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Consumer group Which? has identified 17 parliamentary constituencies, accounting for more than 1.5m people with particularly poor access to cash (three or fewer bank branches and 30 or fewer free-to-use ATMs).
In rural areas poor public transport makes the problem of dwindling cash access worse for an older than average population and in deprived urban areas residents struggling during the cost-of-living crisis need to use cash for day to day budgeting.
More affluent student areas and villages in the home counties are also affected.
Barry Whitehouse, owner of an independent art shop in Banbury, Oxfordshire, said: “As a small retailer, we are always advocating the use of cash as payment, as we know that it is a vital service for older people, or those who do not have smartphones or online banking.
Andrew Rosindell MP.
“Even throughout the pandemic when non-essential shops were permitted to be open, we continued to accept cash, as it was the only method of payment some people had or understood.”
The UK Government has previously said it will legislate to protect the future of cash, and consumer group Which? is calling for this to happen in the Queen’s speech next month.
Jenny Ross, Which? Money editor, said: “It really is now or never to halt the cash crisis.
“Though banking industry proposals for action are welcome, what’s needed most is the legislation promised by the Government to protect cash.
“This should also include making the FCA (Financial Conduct Authority) the key regulator to protect cash services.”
Age UK, Fairer Since and the British Retail Consortium, among other organisations, backed Which?’s call for the Government to legislate to protect the future of cash in its next (May) Queen’s speech.
It highlighted that, since 2018, 12,178 free-to-use ATMs have been cut.
On top of this, 4,685 bank branches have shut their doors since 2015, with a further 226 already scheduled to close by the end of the year.
Cash fears are even more significant in parts of the country which the consumer champion described as having “particular poor access to cash”.
Lewis Shaw, of Shaw Financial Services, said: “The day that cash goes is the day democracy dies.
“Too many large unaccountable institutions reach into our everyday lives with more and more coercive control, often dressed up as efficiency.
“We should be moving the needle closer to liberty and freedom as best we can because if cash goes, we won’t get it back without strife.”
The letter is backed by other organizations including Age UK, Fairer Finance, the British Retail Consortium (BRC), StepChange Debt Charity, the Money and Mental Health Policy Institute, and the Federation of Small Businesses (FSB).
FSB national chair Martin McTague, who sits on the Access to Cash Pilots Board, said: “This Queen’s speech is the last chance saloon where protecting access to cash is concerned.”
Dr Jackie Mulligan, expert on the Government’s High Streets Task Force and founder of the local shopping platform, Shopappy, said: “Cash leaving the high street will be another blow to shoppers, especially elderly ones who may not understand new ways of paying with smartphones and watches.
“The thousands of small businesses we work with are keen to keep cash as an option as without it they would lose customers and, at the same time, their customers won’t be able to buy the products they want.
“A cashless society risks becoming a soulless society. It will also cause a lot of people a lot of anxiety, which is totally unnecessary.”
Since 2018, 12,178 free-to-use ATMs have been cut, which is equivalent to nearly a quarter of free cash machines.
Which? counted 25 ATMs in Sheffield Hallam, among which it found seven charge a fee.
Harrow East meanwhile has lost nearly 60 per cent of its free ATMs since 2018.
Carmarthen East and Dinefwr in Wales has lost 13 out of 15 bank branches since 2015, and has a relatively high proportion of elderly residents.
People aged 65-plus make up around a quarter on average of the population across the 17 constituencies that Which? said have poor access to cash.
Ross Borkett, head of banking at the Post Office, said: “In many places across the country, the Post Office is providing the last counter in town where people can access cash.”
John Howells, chief executive of ATM network Link, said: “While cash usage has fallen by around 40 per cent since the start of the pandemic, millions of consumers including some of the most vulnerable still rely on cash every day.
“As ATM numbers continue to fall, legislation is needed now to move the voluntary commitments of industry into a more formal and regulated arrangement.”
A spokesperson for the Treasury responded to concerns: “We know that cash remains vital for millions of people and we are committed to protecting access to cash across the UK. That’s why we have consulted on plans for new laws to make sure people only need to travel a reasonable distance to pay in or take out cash, and have already legislated to enable shops to offer cashback to customers without them having to make a purchase.”
They added: “We have considered responses to the consultation and will set out next steps in due course.”