New cash fear as 167 bank branches set to be axed

More than 160 bank branches will shut for good between now and the end of lockdown, tentatively scheduled for late March. 

The closures will come as experts warn of an impending crisis over access to cash. They fear that unless urgent action is taken by banks, payment providers, regulators and the Government, the country’s network of free-to-use cash machines and high street banking facilities will disintegrate. 

On Friday, Natalie Ceeney, who chaired the Government’s Access to Cash Review and has led the way in highlighting the demise of cash on the high street, told The Mail on Sunday: ‘We need a national strategy urgently, before the cash infrastructure collapses, leaving millions of people behind.’ 

Fear: The closures will come as experts warn of an impending crisis over access to cash

Although the Government has promised to introduce legislation to safeguard access to cash, there is a concern that when it comes it will be too little too late. 

There are already widespread fears that some banks may withdraw their support for post offices and the cash machine network Link – jeopardising the right of consumers to use the post office for banking services and to use most cash machines free of charge. 

The Mail on Sunday’s analysis of planned bank branch closures paints a grim picture. 

Scrutiny of the websites of the main high street banks shows that by the end of March they will have shut at least another 167 branches in the first quarter of 2021. 

TSB will lead the way, followed by Barclays and Lloyds, with many closures also triggering the removal of free-to-use cash machines. TSB has confirmed a new set of closures in the second quarter of 2021 too. 

On Friday, HSBC, NatWest and Santander said they had yet to confirm any branch closures this year. But experts believe it is unlikely their high street networks will not be trimmed back in response to falling consumer usage, exacerbated by the latest lockdown. 

Ceeney says: ‘Bank branches do not just support those who can’t bank online. They are a core part of the UK’s cash infrastructure. Retailers need branches to get cash floats and to pay in their takings, while counter services are essential for those who are too frail or vulnerable to use cash machines, or who need help with their money.’ 

Derek French, a long-standing advocate of shared bank branches, expects a ‘flood’ of closures this year as the consequences of Covid – reduced branch usage, the growth of contactless payment and online banking – makes the business case for rationalisation overwhelming. 

Ceeney is now heading a project to test new ways of delivering banking services on the high street. They include new-style post offices set up more as ‘banking hubs’ than facilities for people wanting to post letters or parcels. They would provide small businesses with ‘reverse’ cash machines, allowing them to bank cash takings securely, while also allowing personal customers to do their banking with a greater degree of privacy than currently. 

Yet the project has been hampered by successive Covid restrictions. This has led to trials of three ‘pilot’ post office banking hubs being pushed back and they are now unlikely to start until Easter.

French is sceptical about Ceeney’s project – despite supporting shared branches, a model the post office hubs are based upon. He says: ‘An ill-timed pilot of a random assortment of ideas is not enough. The Government needs to wake up to the fact that its promised access to cash legislation has to have teeth.’

So far, the Government has only committed to increasing the number of retailers offering customers free-to-use cashback services – though this could be thwarted by the charges that payment service providers wish to impose on retailers. It has yet to provide detail on how it proposes to compel banks to provide nationwide access to cash and paying-in services.

John Howells, head of Link, says: ‘We see from our own research that there are still several million people who rely on cash. We need action to protect cash access immediately.’