Financial Services and Markets Act receives Royal Assent

The Financial Services and Markets Act 2023 received Royal Assent on 29 June 2023, the Financial Conduct Authority said¹. The Act requires the regulator to seek to ensure the reasonable provision of cash withdrawal and deposit services for personal and business current accounts across the UK¹. It also gave the FCA new powers to act where it finds, or anticipates, shortages in cash access services that would have a significant impact on local areas¹.

The legislation, previously the Financial Services and Markets Bill, was drawn up in response to the UK's exit from the European Union and sets the framework for how the financial services industry will be regulated². It delegates substantial rulemaking powers to the regulators, primarily the FCA and the Prudential Regulation Authority². It also added a statutory objective for the regulators concerned with the promotion of "growth and international competitiveness"². The Finance Innovation Lab, which campaigned on the bill, said the objective ended up as a secondary objective rather than a primary one, and that its final wording concerns the competitiveness of the overall economy while retaining a focus on the financial services sector².

On access to cash, the Finance Innovation Lab said the government "eventually acquiesced and made the necessary amendment to protect free cash access via the Act", following a campaign by Which?². The same account says the Act was intended to enable credit unions to provide a greater range of products, but that a campaign to give the FCA a duty to consider financial inclusion in the round was not supported by the minister at the Commons vote². The Act also expanded a net zero regulatory principle to refer explicitly to nature protection targets in the Environment Act 2021, and the Commons rejected an amendment on mandatory due diligence over illegal deforestation, with the government offering a Treasury-led review into deforestation finance instead².

The FCA set out how it would use the powers. It published a statement on 18 August 2023, the same day the Treasury published its Cash Access Policy Statement¹. It consulted in December 2023 on proposed rules under the new powers, and that consultation closed in February 2024¹. In May 2024 the Treasury designated the banks and building societies subject to the new rules, and designated an operator of cash access coordination arrangements¹. The FCA published its access to cash rules on 24 July 2024, and they came into force on 18 September 2024¹.

The Act's cash provisions sit alongside separate work on cryptoassets. HM Treasury told the Treasury Committee that it "firmly disagrees" with the committee's recommendation to regulate retail trading and investment activity in unbacked cryptoassets as gambling rather than as a financial service⁴. It said legislation on cryptoasset financial promotions was laid before Parliament and debated in May 2023 and would be in force by late 2023, and that it was taking forward legislation via the bill to regulate stablecoins and cryptoasset activities⁴. The Royal Mint is not proceeding with the launch of a non-fungible token at this time but will keep the proposal under review, with no taxpayer money directly used to fund the project⁴.

Why it matters for households

The Act's cash duty covers personal and business current accounts, so the people affected are those who withdraw or deposit cash, including consumers in vulnerable circumstances who rely on it¹. The FCA's Financial Lives 2022 survey found 6% of UK adults used cash to pay for everything or most things in the 12 months from May 2021, rising to 9% among those in vulnerable circumstances¹. Its data shows 95.0% of the UK population are within one mile of a free-to-use cash withdrawal point and 99.7% are within three miles¹.

The FCA's powers focus on access to cash rather than wider banking services and do not prevent bank branches from closing, though the rules apply where a closure leaves significant gaps in a community's cash services¹. Designated firms must assess local cash access when services change, respond to requests for assessment from residents, community organisations and representative groups, deliver reasonable additional services where significant gaps are found, and keep facilities including branches and ATMs open until those additional services are available¹.

Access varies by nation. The Northern Ireland Assembly research service reported that the number of cash access points of all types in Northern Ireland is 16,000, below Scotland at 50,000 and Wales at 27,000³. It also cited FCA research finding that living in Northern Ireland makes an individual over twice as likely to rely on cash as a similar individual in England, and that not being in employment, being permanently sick or disabled, or being retired makes an individual 83% more likely to rely on cash than average³. In 2024, UK banks committed to set up 350 banking hubs over five years, with hubs planned in Kilkeel, Newcastle, Comber, Warrenpoint and Portrush, of which only Kilkeel and Portrush were operational at the time of writing³.

What happens next

The FCA had said it would publish an evaluation of the access to cash regime in 2027¹. The government has since commissioned an independent Review of Access to Banking Services, expected to report in October 2026, and the FCA has paused its planned evaluation to avoid duplication, saying it will set out next steps after the review publishes its findings¹. The FCA said it will continue to monitor and supervise the regime and publish regular coverage updates¹.