by Countryside Alliance

Westminster Hall Debate

“Effect of ATM closures on towns, high streets and rural communities” (Ged
Killen MP, Lab, Rutherglen and Hamilton West) nominated by the Backbench
Business Committee



• Sweeping bank closures are being blamed by banks on the lack of usage, with fewer and

fewer users going into their local branch and preferring to bank online. However,

closures in rural areas, especially in the absence of reliable mobile or broadband

connectivity, can present particularly serious challenges.

• Access to money and finance in rural areas remains difficult. 20 per cent of the

population live and work in rural areas and yet only 12 per cent of bank branches and 11

per cent of cash machines are located there.1 This means it is becoming increasingly

difficult for people and businesses located in rural communities to access their money,

other day-to-day services, and those services necessary to run a local business.

• More than 930,000 households in rural areas live below the Government's official poverty

line. As many as 200,000 people living in the countryside do not have bank accounts of

any kind and cash remains an important part of the rural economy.

• Poor public transport systems and long travel times make physical access to mainstream

financial services difficult and more costly for people living in rural communities. Getting

access to money often means a journey by bus for the many elderly or vulnerable people

who do not own a car.

Access to Cash:


• The personal finance sector is undergoing rapid change, not least with the growth of

internet, telephone and mobile banking. However, access to cash remains important for

many households and businesses in rural areas.

• The closure of retail bank branches is a long term trend. The 479 branch closures in 2014

(UK-wide) marked a significant increase over previous years and was exceeded in 2015

with 650 closures. Some 124 of the closures during 2014 were the last bank branches in

their neighbourhood, particularly affecting rural towns and coastal communities.

• The most recently available rural analysis from 2010 shows there were 1,317 bank and

building society branches in rural locations in England but there are now likely to be far

fewer. These comprised 13 per cent of all branches, the rest being in urban locations.

Only 30 per cent of households in villages were within two and half miles of a bank or

building society branch.

• Credit unions have grown fast measured in terms of their customer base, deposits and

loans. While no rural-specific figures exist, it is clear from their names that many are

serving largely rural areas.



• Britain's ATMs are disappearing at a rate of 500 per month across the UK. The decline

was steepest for fee-charging cash machines, but the number of free-to-use ATMs also

fell by 388 in the first five months of 2018. The number of overall cash points fell by 2,611

to 66,999 in the same period.

• The number shutting down increased six-fold in anticipation of a fee change by Britain's

cash point network LINK, rising from around 50 closures in 2015. These cuts will see

millions of people who rely on cash in their daily lives struggling through these closures -

with severe consequences for many communities and businesses.

• 72 per cent of all cash withdrawn in 2015 was accessed at a cash machine. With 11 per

cent of cash machines located in rural areas there is typically good access to ATMs in

rural towns, but in villages a quarter of households lived more than two and half miles

away. The LINK network runs a financial inclusion programme to plug geographic gaps,

where there is no free-to-use cash machine. So far this has targeted deprived areas,

which are largely urban.

• The planned cut in the fees banks pay to operators of the hole-in-the-wall cash

dispensers is the driving force behind these closures. LINK is beginning a process to

gradually reduce this fee to 20p, which will force many banks and operators to close free


• LINK has pledged to protect access to cash in rural areas through its financial inclusion

programme, which allows an increase in the fee paid in areas where there is only one

ATM within a one kilometre radius.

• Research casts doubt on this claim, suggesting that rural areas have been more harshly

affected by cashpoint closures in the past six month and shows LINK measures to protect

rural cashpoints do not go far enough. One ATM is not enough for a whole village or

town. They are machines, they fail and need to be fixed and that could mean people have

to travel nine or 10 miles for cash.

Post Offices:

• The post office network offers an important means of accessing cash, either using its own

financial products or because it provides access to the current accounts of 20 other banks

and the business accounts of 8 other banks. Half of those who regularly access their

accounts at a post office do so because there is no nearby bank branch. The Post Office

Card Account also remains an important means of access to cash for those on low

incomes. Nationally there are more post offices than there are bank branches (of all the

banks combined). Moreover, the post office network has rural reach, since more than half

of its outlets are located in rural areas, including a presence in many villages.

• The number of post office closures has slowed down, with a net loss of 27 rural outlets

during the 2014/15 financial year. Almost 99 per cent of the rural population lives within

three miles of a post office outlet, comfortably exceeding the 95 per cent target set by

Government and the postal regulator, Ofcom.

Countryside Alliance calls for:

• The regulator to take action to stop further closures of ATMs and ensure that consumers

aren't suddenly stripped of their access to cash.

• Access to Banking Protocol to ensure that when a branch is moved, or closed,

customers are made aware of the banking services offered by the nearest post office.

• The Post Office and banks to standardise the banking services offered over the post

office counter.

• Digital connectivity and skills to be improved to ensure those living and working in rural

areas are able to access banking services online.

For more information please contact:

Sarah Lee
Head of Policy
0207 840 9250

James Somerville-Meikle
Political Relations Manager
0207 840 9260

Download a copy of this briefing here.

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