HM Treasury publishes cash access policy statement

HM Treasury published a policy statement on access to cash deposit and withdrawal services for personal and business current accounts across the UK in August 2023¹. It was issued under section 54 of the Financial Services and Markets Act 2023, which received Royal Assent on 29 June 2023³ after gaining royal assent in June 2023¹. The act requires HM Treasury to produce and keep under review a policy statement on cash deposit and withdrawal services, and gives the Financial Conduct Authority (FCA) regulatory functions in relation to maintaining those services¹.

The statement set out the government's minimum expectations for banks. It said FCA analysis had found that at least 95% of people in predominantly urban areas of the UK had access to cash deposit and withdrawal services within a mile of where they lived, and at least 95% of people in predominantly rural areas had such access within three miles¹. The government said its aim was to ensure that coverage was maintained¹. It also said that any proposed alternative service, under FCA rules and guidance, must be established before any significant closure or change to an existing service¹.

The statement followed a long decline in branch numbers. Data from the British Banking Association and the Office for National Statistics showed bank branches in the UK fell from 14,689 in 1986 to 5,745 in 2023, while building society branches fell from 6,954 to 1,925 over the same period¹. A separate compilation put total bank and building society branches at 21,643 in 1986 and 6,870 in 2024².

Reaction was mixed. Martin McTague, national chair of the Federation of Small Businesses, said his organisation welcomed the plans in principle but awaited further detail on how measures such as the three-mile rule would be implemented¹. Jenny Ross, editor of Which? Money, said it was "good to see the government moving quickly and issuing guidance for banks to follow", and that the FCA "must be ready to take strong action" against firms that "fall short of the required standards"¹. Tulip Siddiq, then shadow economic secretary to the Treasury, argued the statement was "not enough to protect in-person banking services for all communities"¹. Derek French, a former NatWest executive and campaigner on cash access, described it as "very vague"¹.

Why it matters for households

The statement concerns anyone holding a personal or business current account who deposits or withdraws cash, and sets the Treasury's expectations for how far people should have to travel for those services. It sits alongside the access to cash rules that the FCA later consulted on in December 2023 and finalised in July 2024, with the new rules coming into force on 18 September 2024¹. The FCA had previously published initial guidance in 2020 for banks intending to close or reduce branches or free-to-use ATMs, and revised that guidance in 2022, saying some banking companies had "fallen short of expectations"¹.

The practical effect depends on where a household lives. FCA analysis covering April to June 2023 found 76% of the rural population lived within one mile of a free-to-use cash access point offering withdrawals, and 99% within three miles; 36% lived within three miles of a bank or building society branch, 69% within five miles and 97% within 10 miles². In Northern Ireland, analysis by the Consumer Council for Northern Ireland in 2023 found 166 electoral wards had two or more banking services, 187 had just one and 109 had none at all³. FCA research found living in Northern Ireland made an individual over twice as likely to rely on cash as a similar individual in England, and not being in employment, being permanently sick or disabled, or being retired made an individual 83% more likely to rely on cash than average³.

Groups representing affected customers have documented the consequences.

What happens next

The policy statement itself set no deadline for banks. The FCA consulted on a new regulatory regime in December 2023¹, published a policy statement in July 2024 setting out new rules it said would come into force on 18 September 2024², and those rules took effect on that date³. On banking hubs, Link recommended 101 new hubs on 12 January 2024¹, and UK banks have committed to set up 350 hubs over five years³. The government has said it is working with industry on rolling out 350 hubs by the end of the current Parliament, with over 200 announced and more than 100 open². In Northern Ireland, hubs are planned in Kilkeel, Newcastle, Comber, Warrenpoint and Portrush, with only Kilkeel and Portrush operational at the time of that briefing³.