A third of over 50s say a bank is an essential service in their area
Almost a third of older people have said the Scottish Government’s 20 Minute Neighbourhood initiative cannot work in their community due to a lack of available local services and facilities.
Age Scotland’s Big Survey 2023 asked older people about the proposal, currently under consideration, which aims to allow everyone access to essential goods and services within a 20 minute journey from home.
When asked what services would be essential for a ‘20 Minute Neighbourhood’ to be successful, 32% said a bank, 23% said a post office and 23% said community spaces. The top three facilities that respondents felt essential were accessible toilets (41%), good digital connectivity (33%) and buses with local bus stops (25%).
The findings highlight the importance to older people of being able to go into a bank branch or post office to manage their money, an arrangement that has become increasingly challenging with the widespread closure of bank branches across the country.
The availability of accessible and clean toilets is another factor which determines whether some older people feel confident getting out and about in their local area.
Other important facilities and services included access to a hospital and GP service, a supermarket or grocery store, and access to local green spaces.
These findings showcase the importance of access to health and wellbeing facilities in a local community, in addition to local services and social spaces.
However, Scotland’s national charity for older people found that although 28% of respondents said they already lived in a 20 Minute Neighbourhood and 23% believed it could be achieved, almost one third – 32% – said it was not possible and they didn’t think it could work in their community.
Additionally, older people living in rural areas all said a 20 Minute Neighbourhood was unachievable, further highlighting the barriers older people in remote communities face with accessible transport and local high street closures.
Katherine Crawford, chief executive of Age Scotland, said: “Our findings show that for many older people 20 Minute Neighbourhoods won’t work because of a lack of the services that they use on a regular basis.
“Bank branches, for example, are hugely important for the tens of thousands of older people who do not have access to internet banking and prefer to manage their finances by going into a branch and speaking to a member of staff face to face.
“The slew of bank branch closures we have seen across Scotland, creating banking deserts in some parts of the country, have forced many older customers to drive or take public transport some distance to find a branch in a larger town or city. That certainly doesn’t meet the 20 minute aspiration.
“Equally the closure of some public toilets is off putting to some older people who worry about travelling any distance from home without knowing there are clean and accessible public toilets nearby.
“The concept of 20 Minute Neighbourhoods is a great way to encourage people to use local services – but if they services they need are not available, then it doesn’t work.
“We would call on local authorities to keep public toilets open wherever possible and to banks to think about the consequences of their closures before pulling out of communities and depriving older customers of easy access to their money.
“It is vital that older people’s views help shape the 20 Minute Neighbourhood initiative, and investing in local services that are important to them will go a long way to ensuring that the scheme benefits entire communities.”
The Big Survey 2023
Our national survey of more than 4,100 over 50s in Scotland captures their views and experiences, identifies the challenges older people face in Scotland today, and broadly tracks how lives have changed over time.
Half a million people across Scotland who are dependent on cash risk being forgotten by banks due to the unprecedented rate of closures. Since 2015, 53% of Scotland’s bank branches have closed, which represents the highest percentage loss across the UK’s four nations.
From difficulties adapting to a society built on digital payments, to older people on lower and fixed incomes using it as a budgeting tool, many people opt to use cash for a number of reasons.
However, Westminster’s Scottish Affairs Committee raises concern that not enough support is being offered to support these individuals as the UK transitions to an increasingly digital society, nor has adequate research been undertaken to understand the full implications of such a move.
The Committee welcomes the Government’s introduction of its Financial Services and Markets Bill, which includes added protections on access to cash. The then-Treasury Minister John Glen, when appearing before the Committee, recognised the need for a more detailed picture of cash usage in Scotland.
The Committee is concerned that the rapid rate of bank branch closures may be as a result of banks rushing to close branches before legislation can take effect to protect access to cash and banking services.
In addition to Government legislation hoping to support access to cash, there have also been a number of voluntary agreements championed within the sector. This includes LINK’s Financial Inclusion Programme, which provides free access to cash via free-to-use ATMs in the most rural and deprived areas of the UK.
The Committee is of the view however that this should not be left to a voluntary agreement which leaves it vulnerable: future legislation should complement industry-led initiatives to guarantee free access to cash.
While access to cash in Scotland paints a deeply concerning picture, the Post Office has filled the void of many banking services within communities. It is deeply disappointing that Scotland has seen the highest percentage of Post Office closures anywhere in the UK, yet its resource and the service it offers appears to be steady.
In recent years, its offering of banking services has grown, and now offers customers more services than ever before, with the recent renewal of the Banking Framework Agreement. The Committee recommends that a long-term commitment is sought from banks to maintain appropriate banking services for their customers using the Post Office network.
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.
“Since the predecessor Committee’s inquiry considering this very issue, it is welcome that the Government is legislating to protect access to cash. However, this positive announcement is beset by the risk that banks may close their doors before legislation on this matter comes into force.
“We are aware of the commercial considerations affecting banks, which has played a role in the recent increase of branch closures. We welcome the effort taken by the banking industry to protect access to cash, although we still feel that there is a clear need for legislation.
“In our report today, we are calling for more research into the implications of a cashless society and more secure and longer-term agreements to ensure the continued access to cash. The Government appears to be in listening mode on this issue, and I look forward to its response in due course.”
Recommendations
The Committee’s recommendations are:
The UK Government should consider asking the Financial Conduct Authority (FCA) to investigate and monitor cash acceptance levels across the UK.
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.
The UK Government should clarify how the Financial Services and Markets Bill will interact with pre-existing industry-led solutions such as LINK’s Financial Inclusion Programme.
We recommend that the UK Government consider legislating in the Financial Services and Markets Bill to mandate the membership of LINK for card issuers and ATM operators to ensure that the Financial Inclusion Programme can continue to provide free access to cash for as long as it is needed.
Attempts to introduce deposit-taking ATMs for both consumers and SMEs have been constrained by a considerable lack of progress from both the banking industry and the UK Government. Considering the strength of the evidence to support their introduction, we repeat our predecessor Committee’s recommendation that the UK Government set up a working group with industry to introduce network-wide deposit-taking ATMs.
Building on the structure and objectives of the Banking Framework Agreement, we recommend that the UK Government seek a long-term commitment from banks to maintain appropriate banking services for their customers using the Post Office network, to guarantee access to cash and basic banking services for all communities in Scotland.
Nine communities across the UK are taking part in a trial to help address the challenge of improving access to cash. Two – Cambuslang and Denny – are in central Scotland.
The Community Access to Cash Pilot (CACP) initiative chose the communities based on the location, the issues the communities faced, and the local people willing to lead the pilots.
Each community will trial a number of different solutions, based on meeting the needs of local communities. These include:
Three new local ‘banking hubs’ in dedicated retail spaces on the high street, which combine the cash-transaction facilities of a Post Office with access to community banking services offered by the key retail banks, allowing the privacy and security people expect in a bank branch
Speedy and automated local cash deposit facilities for small businesses, so that retailers don’t have to close to travel to a nearby town bank branch to deposit their takings
Existing Post Office branches restructured and refurbished with cash services streamlined to make it easier for local residents and businesses to withdraw and deposit cash quickly and safely.
Pop-up Post Office services, allowing small communities to access basic banking services over a Post Office counter within an existing small shop
Widespread ‘cashback’ from local stores, restaurants and pubs – as well as from PayPoint counters, and new app-based digital services – to widen the options for people to get cash locally, and to help business reduce their own costs of depositing cash
New, free to use ATMs
Digital education services to help those who want to access digital banking services
The original plan was for each pilot community to start implementing their solutions over the remainder of 2020, with the aim that they are all fully operational by the end of 2020. The pilots were to operate for the first six months of the 2021, reporting back their findings in the summer of 2021. However the timetable has been revised due to the Covid pandemic.
The pilots operate in a wider context of a UK-wide cash infrastructure under threat, millions dependent on cash, and a government commitment to legislate to protect cash access. The aim of these pilots is to trial solutions which could have wider applicability across the UK.
CACP is chaired by Natalie Ceeney CBE, the author of the Access to Cash Review and brings together the resources and expertise of the financial services industry (including all of the major retail banks) with those of the Access to Review panel.
The team is also working closely with a wide range of local and national consumer groups and charities to bring in depth expertise to help support the work.
Speaking when the initaitve was launched last year,Natalie Ceeney, Chair, Community Access to Cash Pilot, said: “Cash remains critically important to both individuals and communities across the UK. The rapid switch to digital is threatening the viability of today’s cash infrastructure.
“This can lead to consumers left without cash access or forced to leave their own village or town to get cash elsewhere, often at significant inconvenience and cost. In turn, local retailers lose custom, as consumers spend their cash elsewhere, and then struggle to bank their cash takings without shutting up shop to drive to a bank branch some miles away, losing revenue and frustrating customers. It’s critical that we find ways to protect the viability of cash, for consumers and communities alike.
“These pilots are designed to find sustainable ways to keep cash viable locally, which, if successful, can then be rolled out more widely. The government has already committed to legislate to protect cash, and the financial services regulators are working closely with banks to identify practical next steps. Our aim is to use the pilots to critically inform this work.
“The work we’ve done with local communities has shown us in some detail what is needed. It’s clear that to keep communities viable, people need to be able to get cash easily, in a variety of ways. ATMs are important, but don’t meet everyone’s needs, particularly the most vulnerable, so being able to get cash over a counter, in a safe space, is still important to many. Small businesses equally need to be able to deposit cash, and locally, so that they don’t need to close their shop to bank their cash.
“These pilots will use innovative technology to help people access and deposit cash. The pilots will also work with key existing service providers to explore how they can support the cash infrastructure, by creating local drop in spaces for community banking, retailers offering cashback widely and Post Offices enhancing their services to create a new model of ‘Post Office Banking Hubs’.
“The commitment of the major banks, the Post Office, LINK and key consumer groups to all work together on this initiative gives us confidence that we can create solutions which keep cash viable in a sustainable way.”
Nick Read, Chief Executive, Post Office: “Our branches provide critical cash deposit and withdrawals services for millions of personal and business customers every week. We will use these pilots to trial new designs in selected branches; and introduce automated cash deposit facilities for business and personal customers who may have previously used this service at a bank branch.
“Everyone should have the right to use cash and be able to easily and securely access it wherever is most convenient to them. We are pleased to be playing a key role in these pilots and our Postmasters who are taking part will be in a position to share important insights that will make a real difference as to how we continue to best meet peoples’ cash needs in future.”
Alison Rose, CEO, NatWest: “We know that cash is an important part of the way that many communities across the UK bank with us, which is why we have worked with the industry to help create this pilot programme.
“The lessons we learn from working with communities to develop innovative solutions are really important as we continue to invest in sustaining access to cash and financial capability.”
John Glen MP, Economic Secretary to the Treasury and City Minister: “Cash remains important to the daily lives of millions of people across the UK, and protecting access to it is a key Government priority.
“I welcome the Community Access to Cash Pilot Initiative, which will test innovative new approaches to support access to cash in local communities that can be extended across the UK. Thank you to Natalie Ceeney and all industry participants for their important work to ensure we support consumers and businesses who continue to need to use cash.”
Two of the nine locations are in Scotland:
Cambuslang:
Cambuslang is a town of c.28,600 people, the third largest town in South Lanarkshire, but since 2018 has been unbanked following the closures of branches by three banks in quick succession.
According to the latest version of the Scottish Index of Multiple Deprivation (SIMD), some 40% of areas (data zones) in Cambuslang East and 25% in Cambuslang West are in the bottom 20% of the SIMD.
The Cambuslang community are keen to address two key issues, first, supporting financially vulnerable customers in accessing cash, and second, supporting small businesses to be able to access and bank cash.
The local leaders of this pilot, Cambuslang Community Council, are passionate about the opportunity to support their community though better access to cash, education and, ultimately, influencing the coming legislation change.
The Cambuslang community will be piloting:
A Post Office Banking Hub in an empty retail outlet, with the Post Office offering transactional services in a private environment, with community banking support from the major banks, debt advice, and support for financial issues
A ‘Drop and Go’ cash deposit facility for small businesses in the Banking Hub to make it easier for local businesses to bank cash, whichever bank they are with
Cashback with purchase offered by a large number of local stores
Cashback without purchase offered by PayPoint convenience stores
Widespread advertisement of what the banks can offer vulnerable customers
Digital education services to help those who want to access digital banking services, designed for the Cambuslang community
A Vulnerable Customer Directory – ensuring that everyone is aware of the services that the retail banks can offer to vulnerable customers
Denny (Falkirk):
Denny is a small town located between Edinburgh and Glasgow, with a population of circa 8,000, and with 16% of the population over 65 years old. They are a semi-urban location that has seen a reduction in their access to cash facilities.
They are looking to improve the cash deposit and withdrawal facilities for both small local retailers and consumers, and also want to support their community to be able to budget and access cash digitally.
The Denny community will be piloting:
Cashback with purchase offered by a large number of local stores
A refreshed Post Office with improved cash facilities which can better meet community needs
Cashback without purchase offered by PayPoint convenience stores
Digital education services to help those who want to access digital banking services
A Vulnerable Customer Directory – offering support to those who need it
A digital solution to coin recycling supported by Shrap – an innovative new service which allows consumers to store change on a card or app, saving retailers from managing small change
A Vulnerable Customer Directory – ensuring that everyone is aware of the services that the retail banks can offer to vulnerable customers
Gareth Shaw, Which? Head of Money, said: “These initiatives could have a really positive impact on communities that have seen sharp cuts to their cash machine and bank branch networks in recent years, which have forced some cash dependent consumers to travel unreasonable distances or face hefty charges to withdraw their own money.
“However, in order for cash to remain a viable option for people across the UK, the government must take action. It needs to urgently set out when it will introduce the legislation it promised last year to protect access to cash, and put a wider strategy in place that ensures people who depend on cash are not cut off from the money they need to pay for essentials.”
Following a session with executives from the Royal Bank of Scotland over bank branch closures, Pete Wishart MP, Chair of the Scottish Affairs Committee, said: “The whole committee has been left disappointed and frustrated with the unsatisfactory appearance of RBS executives at the Scottish Affairs Committee. They seem to not be listening to the deep concerns from communities right across Scotland over their branch closure programme.
“It is abundantly clear that RBS did not consult with anyone over their plan to close a third of their branches. They do not seem to appreciate just how devastating the loss of a bank can be to a local community, and quite how important easy access to banking services is to individuals and businesses.
Nor do they appear to have any intention to reconsider their position despite the views expressed by local people, or by the witnesses we heard from today – Scottish Rural Action, Unite Scotland and Scottish Chamber of Commerce. Instead they could not rule out further branch closures.
“We should not forget that this is a company whose very survival was assured by £45 billion from the tax payer, who still own a 70% stake. Yet we were told that due to changes in “customer behaviour”, branches will close, creating savings of £9.5 million. Instead people will have to rely on internet banking in areas where connections are poor, or a mobile branch which will be available for perhaps an hour a week.
“At a minimum, RBS needs to show greater care for their customers and show more openness in how they reach decisions that have such serious consequences for so many people. As a committee we will carefully consider what we have heard today and may take further steps.”
