Cash use in some parts of Britain has fallen 90 per cent as ATMs were switched off or ran out of money and consumers rejected notes and coins over fears that they could carry Covid-19. Data compiled by The Sunday Times shows that 7,200 cash machines were shut down in April and May, with 5,040 still out of action, raising fears that many may never reopen.
Dozens of communities were left without a cash machine within three miles. Many ATMs were turned off as they ran out of money and others were closed because the premises they were in was forced to shut under the rules of lockdown. About one in eight of the terminals in Britain’s network of 60,000 machines was shut at the peak of lockdown, according to the network operator Link.
An estimated 2,280 bank and building society branches — about one in eight — also closed, although many are now open again. Senior banking executives are discussing the widespread closure of branches, according to our sources.
Sunday Times Money understands that the situation has become so critical that the Treasury is preparing legislation that would force banks to provide all customers with free-to-use ATMs within a reasonable distance from their homes.
Cash withdrawals in May fell by half compared with the same month last year, Link data shows, after reaching a record low of £945 million in the last week of March, the first time withdrawals fell below £1 billion since 2005.
Some of the most deprived regions in the country had the smallest declines in cash withdrawals, including constituencies such as Birmingham Hodge Hill and Liverpool Walton. The drop was most pronounced in city centres — central Glasgow fell 80 per cent, and the figure hit 89 per cent in Westminster and the City of London.
Some ATMs were closed because operators were unable to get access to the safe behind machines located on the wall of shops or petrol stations that had to shut.
Those in locations such as cinemas, theme parks, bingo halls and holiday parks are still unavailable and cannot be accessed by security vans for refills. In many cases the switch to contactless card payments means that usage is expected to fall to the point where the machines will become unsustainable.
In pubs, garden centres and convenience stores that have reopened, hundreds of ATMs lie empty because they rely on the premises’ owners to fill them. Normally retailers would use money from their tills to keep the machine stocked up, but thanks to a surge in digital and card payments rather than cash, they do not have enough.
Even as the hospitality sector reopened in England last week, consumers took out a third less cash than usual, with £1.6 billion withdrawn compared with £2.4 billion this time last year.
Natalie Ceeney, who led a government-commissioned review into access to cash in 2018, said that she is regularly contacted by communities where the loss of a free ATM has caused serious hardship. She said: “Before lockdown our cash infrastructure was already on a knife edge. We know that the places most dependent on cash are the most rural and poorest communities across the UK.
“The loss of thousands of cash machines during the past three months shows just how urgently we need action from the government and banks.
“Quite simply, digital payments don’t yet work for everyone, and maintaining the UK’s cash infrastructure is essential to stop millions being left behind.”
Between July and December last year 1,670 cash machines closed permanently. The town of Bungay in Norfolk lost its last bank branch when Lloyds closed two years ago and the council hashad to install a cash machine at the town hall.
The town’s recently elected mayor, Bob Prior, 71, said that he rarely uses cash, but the high proportion of elderly residents in the village rely on it. Market stalls that visit the town every Thursday find that the mobile and internet signal is too poor to make their portable contactless machines work and still do much of their transactions in cash.
Towns such as Durness in Scotland, Tywyn in Wales, and Deal and Margate in Kent have also had to fight to keep a cash machine.
John Howells, the chief executive of Link, said: “Link is expecting some ATMs not to reopen, mainly where the locations that they are in do not reopen, or where machines next to others are removed to maintain social distancing.
“In all cases the public can be reassured that Link will take action to maintain overall coverage and that all high streets large and small will continue to have free access to cash.”
The Treasury said: “We know that many individuals and businesses still rely on cash, which is why we’re co-ordinating work across government, regulators and industry, so we can protect access for everyone who needs it, and have committed to bring forward legislation. Part of this work includes investing over £2 billion in the Post Office since 2010, giving people across the country local access to everyday banking services.”