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UK cash economy close to collapse, campaigners tell chancellor

Authors of the Access to Cash Review are calling for extra safeguards to support the UK's cash infrastructure, which has come under severe strain in the 12 months since the original report was published last March.

Article originally published by The Guardian. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

The new chancellor, Rishi Sunak, is being urged to include measures to protect access to physical money as part of the March budget, as experts warn the UK’s cash system has edged closer to collapse.

Authors of the Access to Cash Review are calling for extra safeguards to support the UK’s cash infrastructure, which has come under severe strain in the 12 months since the original report was published last March.

The review warned then that more than 8 million UK adults would struggle to cope in a cashless society, with a significant number still relying on cash for day-to-day transactions.

The group, which is led by the former Financial Ombudsman Service boss Natalie Ceeney, wants parliament to hand extra powers to regulators and introduce rules forcing banks to provide suitable access to cash for customers.

“The UK is fast becoming a cashless society – without knowing what this really means for consumers or for the UK economy,” Ceeney said. “Many people may want a completely digital future, but we need to make sure that this shift doesn’t leave millions behind or put our economy at risk.”

In the past year, 13% of all free-to-use ATMs in the UK have closed and the number of charging ATMs has jumped from 7% to 25%, costing consumers £29m more in fees.

More and more shops are going cashless, as bank branch closures make it harder for retailers to deposit their cash. Major retailers such as Tesco are piloting stores that only accept cards and digital payments, while British Gas announced last year that customers would no longer be able to pay their bills in cash at PayPoint terminals in shops.

“This is already starting to exclude people,” the Access to Cash panel said.

Consumers are relying more heavily on the Post Office network for withdrawals because of bank branch closures, but that service has also come under threat.

Last year Barclays announced it was pulling out of a deal that allowed its customers to take out money at post offices, prompting a barrage of criticism. The high street lender eventually bowed to public pressure and signed on to the deal for another three years.

Jenny Ross of the consumer group Which? said: “Without legislation many more communities will be cut off from cash or forced to pay hefty fees to access their own money.

“The new chancellor must seize this opportunity and guarantee long-term access to cash in the budget, while developing a clear strategy to ensure that the transition to digital payments doesn’t leave anyone behind.”

The Treasury said the government had already invested £2bn to secure banking services through the Post Office network and was “working closely with industry and regulators to ensure everyone who needs cash can access it”.


This article was written by Kalyeena Makortoff Banking correspondent from The Guardian and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.

Article originally published by The Guardian. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

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