Half-a-million people across Scotland are at risk of losing access to cash due to the current rate of bank branch closures, a new report has found.

According to the Scottish Affairs Committee’s Access to Cash report, more than half (53%) of Scotland’s bank branches have closed since 2015 – the highest percentage loss out of the UK’s four nations.

While many Scots rely on cash to keep track of their monthly budgets, the report warned that a significant portion use cash due to difficulties in adapting to digital services – and older people are at high risk of being left behind.

The report raised serious concerns that not enough support is being offered to support these individuals as the UK transitions to an increasingly digital society.

Age Scotland welcomed the publication of the report and urged the government to prevent vulnerable members of society from being left behind amidst a period of rapid digitisation.

Adam Stachura, Head of Policy and Communications at the charity said: “As the cost-of-living rises, it is more important than ever that older people can access their money in cash form for free whenever they need to. Many older people would be lost without cash, which allows them to confidently and safely budget, spend and feel in control of their finances.

“This is particularly important for people on low and fixed incomes, as well as the hundreds of thousands of over 60s in Scotland who do not have access to the internet.”

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The Post Office has filled the void of banking services within many communities, the report revealed. However, Scotland has experienced the highest percentage of Post Office closures anywhere in the UK.

To counter this, the report recommends that a long-term commitment is sought from banks to maintain “appropriate banking services” for customers using the Post Office network.

Protecting Access to Cash

Efforts are being made to protect access to cash and prevent financially vulnerable people from being left behind, the report noted.

The UK Government’s Financial Services and Markets Bill includes protections on cash while a number of voluntary agreements have been implemented in the financial services sector.

This includes LINK’s Financial Inclusion Programme, which offers free access to cash via ATMs in some of the UK’s most rural and deprived areas. The Committee called on the UK Government to consider protecting such industry-led programmes in forthcoming legislation.

Notably, the Committee raised additional concerns that the rapid rate of bank branch closures could be due to banks rushing to close locations before any prospective legislation can take effect.

Scottish Affairs Committee Chair, Pete Wishart MP, said: “Access to cash across Scotland has been decimated in recent years, leading to Westminster Committees investigating the issue multiple times.

“While the move to digital banking and payments has offered a method at which to do transactions that many of us enjoy, we cannot forget the 500,000 people in Scotland who rely on cash in their day-to-day lives.

“With the cost-of-living crisis deepening, many people are using cash for budgeting. But what is deeply worrying is that bank branches are closing at a record rate with very limited research or thought conducted of the possible widespread implications.”

A key recommendation of the report notes that the UK Government should consider asking the Financial Conduct Authority (FCA) to investigate and monitor cash levels across the country.

The report added: “If the FCA find a substantial number of retailers refusing to accept cash, the UK Government should introduce additional protections to ensure that consumers reliant on cash are not disadvantaged.”

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