Cash has been in steady decline in recent years as many people have turned to different ways of paying. Back in 2006, cash accounted for 62% of payments. It’s predicted that by 2031 this will be down to just 6%. But that’s still billions of payments, and the people who rely on cash are often some of the most vulnerable people in society. This is why our Members have come together to establish Cash Access UK.
The Access to Cash Review
Our story begins in 2019 with the Access to Cash Review, which accelerated efforts to address cash concerns in the UK.
The review conducted a lot of research into payment methods, trends, consumer needs and behaviour, and the financial and economic drivers of the cash economy. It looked at global trends in cash usage, and met policymakers and market participants in Sweden – then the most cashless country in the world.
The review concluded that although cash UK was in rapid decline, we were simply not ready to go cashless. It highlighted that over 8 million adults would struggle to cope in a cashless society, and that while most of society recognises the benefits of digital, the technology doesn’t yet work for everyone.
The review also challenged government and industry to take steps to avoid sleepwalking into a cashless society to avoid leaving millions of people behind.
The Community Access to Cash Pilots
Shortly after the Access to Cash Review was published, one of the major banks suggested that they join forces with other providers, consumer groups and communities to explore new ways to protect cash access. The idea was to find new cash services that worked better for communities and were more sustainable for the industry.
Eight communities took part in the pilots during 2020 and 2021. They tested shared banking hubs, three different types of cashback, faster and easier cash deposits for small businesses, OneBanks kiosks, coin recycling and refurbished Post Offices. Every community also had a free- to-use ATM.
The pilots found that:
- Different services worked well in different communities - and there is no 'one size fits all'.
- Improving local access to cash helped save people time and money - and for many people on low incomes, the impact was transformative.
- Small businesses benefit significantly from local, reliable deposit services. They also welcome the wider benefits of better access to cash including increased footfall and regeneration.
- It was possible for banks to share premises, and where they did, Banking Hubs met the widest range of needs in the community.
The Cash Action Group
Building on the findings of the pilots, in May 2021 the major banking firms came together once again with leading consumer groups to form the Cash Action Group.
The Group set out to design a new framework to protect cash access over the longer term. In December 2021 the Group announced a landmark agreement under which every community affected by a branch closure have its cash access needs assessed independently by LINK. Any new services would be provided by a new, not-for-profit company - Cash Access UK, which was established a year later.
Find out more about LINK's independent decision-making process.
The Financial Services and Markets Act 2023
Alongside industry's efforts to protect cash access, the government has introduced a new law to protect, for the first time, reasonable cash access through withdrawal and deposit facilities. The new Act also gives the Financial Conduct Authority responsibility for overseeing the maintenance of a well-functioning cash system.
The Act received Royal Assent on 29 June 2023 and the regulator is expected to consult on new rules which will come into effect by summer 2024.