Chancellor expected to protect cash for millions of Brits at Budget

Millions of Brits who rely on cash will continue to have easy access to their money for years to come, the Chancellor is expected to announce at Budget.

Despite a huge increase in the use of digital payment methods in recent years, which has benefitted individuals and businesses, around 2 million people in the UK still rely on cash for their day-to-day spending - with 3 in 10 payments still made using notes and coins. In 2018, 50 million adults used cash machines, with 87% of them using one at least once a month. 

In a move that protects the future of cash, Rishi Sunak is expected to commit to introducing new laws that ensure those who rely on cash, including vulnerable groups and local communities across the UK, can access it as and when they need it.

Immediately after Budget, the Treasury will begin talks on the new legislation with industry and regulators - the Bank of England, Financial Conduct Authority and Payment Systems Regulator - who work together to ensure customers’ payment needs are met across both digital methods and cash.

One area being looked at is whether to give watchdogs new powers that ensure banks continue to properly support their customers’ cash needs. The Treasury also wants the banks to create a new system for moving money around the country, so cash remains accessible for those who use it every day.

While industry initiatives – like providing banking services via local Post Offices and initiatives for local communities to request a new free-to-use ATM – are welcome and have gone some way to maintaining access in the short-term, the Chancellor has decided stronger action is needed to secure cash’s long-term future.

The commitment to legislation builds on government efforts to protect cash, including:

• Investing £2 billion since 2010 to ensure everyday banking services, including the ability to deposit and withdraw cash, are available at the Post Office’s 11,500 branches across the UK
• Setting up the Payment Systems Regulator in 2015, to regulate the LINK ATM network and make sure that user needs are taken into account
• Establishing the Joint Authorities Cash Strategy group (JACS) to bring together the Treasury and regulators to ensure thorough oversight of the UK’s cash system

Further details on legislating to protect access to cash will be set out in due course.

Notes to editors

• Ahead of setting out final details of legislation, the Treasury will look closely at how other countries have intervened to protect cash.
• International examples being looked at include Sweden, which has recently legislated to require large banks to provide their customers with facilities for withdrawing cash, after cash use fell to lower levels than in the UK.
• In the UK, contactless card payments increased by 13% to 7.4 billion in 2018.
• While the number of free-to-use ATMs is falling, there are still 13% more free-to-use ATMs across the UK than a decade ago.
• Free-to-use ATMs on the LINK network were used 11% fewer times in 2019, compared to a year earlier.
• One of the key responsibilities of the Bank of England as the UK’s central bank is to maintain confidence in the currency. The Bank of England has convened relevant people from the cash industry to develop a new system for wholesale cash distribution that is efficient, resilient and sustainable. 
• The Financial Conduct Authority has statutory objectives to protect consumers, enhance the integrity of the UK financial system and promote competition in consumers’ interests. The FCA provides regulatory support for innovation in financial services, by eligible firms, through Innovate and the Sandbox.
• The Payment Systems Regulator is responsible for promoting effective competition in the markets for payment services and systems, promoting innovation in payment systems, and promoting the interests of business and consumers using payment systems. The Payment Systems Regulator holds LINK – the UK’s largest ATM network – to account for its public commitment to protect the broad geographic spread of ATMs across the UK.
  • Last year, LINK boosted funding for transactions made at protected free-to-use ATMs, including those in remote and deprived areas, with super-premiums of up to £2.75 per transaction.
  • LINK has committed to replacing protected ATMs where there is no free ATM or Post Office counter within 1 kilometre.
  • Money from LINK’s members has also funded the new free-to-use ATMs in local areas across the country, including in Durness, Scotland; Margate, Kent; Silsoe, Bedfordshire; New Tredegar, Wales; Battle, East Sussex; Gartcosh, Scotland; Nuneaton, Warwickshire; and Bedlinog, Wales.