Smart Money: I rely on cash for my budget, so how will I cope with my bank closing? -Jenny Ross

Question: I live in a rural area and the news that one of the last bank branches in my nearest town is about to close is concerning, especially at a time when fuel costs are high and I rely on money for my budget.

Answer: For millions of people in this country, cash is not a relic of the past but an important part of everyday life.

New research from lender Abound confirms the importance of cash. He estimates that only 5% of people have not withdrawn money from an ATM in the past 12 months. Some 80% of Britons said they had withdrawn money in the last three months. Earlier this year, the post saw a record £805million in cash withdrawals.

There are many reasons for wanting to use cash, including to track expenses during the cost of living crisis. Who? research has found that millions of people believe cash makes budgeting easier, and even those who don’t typically use cash have said they might resort to it if their finances become more strained.

More than 12,000 free ATMs – almost a quarter of the entire network – have disappeared since 2018

As convenient as digital payments can be, not everyone is ready or willing to go completely cashless. Digital payments aren’t foolproof either. It is important that those who wish to use cash can do so without the barriers they currently face.

Yet the growing reliance on cash comes against a backdrop of shrinking monetary infrastructure – and sadly, this is affecting you and many others.

Who? has followed the closing of ATMs and bank branches over the years and the changes have been drastic. Since 2018, more than 12,000 free ATMs, almost a quarter of the entire network, have disappeared. The number of bank branches, which allow consumers to withdraw and deposit money as well as access face-to-face banking services, has fallen by more than 4,600 since 2015 – and more are expected close by the end of the year.

Closing a bank branch is a business decision made by individual companies, many of whom have cited changing consumer spending habits for reduced opening hours or the removal of a site. But the impact these closures can have on local communities can be devastating.

Recognizing the impact of the closures on local communities, the banking industry has been encouragingly offering alternative forms of access to cash or in-person customer services. Banking hubs are being opened across the country but will need to be targeted and of sufficient scale if they are to fill the voids left by branch closures. Post offices also have an important role to play in enabling people to withdraw and deposit cash.

Who? has long campaigned to protect access to cash for those who depend on it and earlier this year the government announced legislation in the Queen’s Speech. The Financial Services and Markets Bill is currently going through the Houses of Parliament and would give oversight of the cash network to the Financial Conduct Authority (FCA), meaning branches cannot close in communities if there were no other withdrawal methods. or deposit money.

Who? believe this important bill could be a game-changer for the millions of people across the country who rely on cash on a daily basis. But currently, the legislation does not protect free access to cash.

Unless this changes, we believe it will undermine the purpose of the legislation – what good is protecting access to cash if many people cannot afford it? MPs will soon be able to vote on whether access to cash remains free – and which one? will lobby to make sure.​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​ ​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​