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Five pound paper notes.

Is the push to online banking putting older people at risk?

High street banks are swiftly closing down ‘non-performing’ branches, resulting in some communities being cut off from their cash. What impact does this have on older people?

Evidence Officer, Nayyara Tabassum, writes that older people are often the hardest hit when cash points disappear. 

Bank branches and free-to-use cash machines are rapidly disappearing from rural communities, meaning that more and more often, people are having to travel or pay to be able to access their own money.

More than 3300 bank branches have been closed across the UK in the past four years, as banks continue to push customers towards online banking. Most of these closures have been in rural areas, and have resulted in entire communities being left without any cash access.  

Despite the increased challenge to obtain it, cash continues to be a preferred method of transaction for many people across the UK. About 3.5 million older people have never used the internet and many aren’t confident in online banking.

Left without a local branch, residents of rural areas – who tend to be older on average than in urban places – are forced to travel to different towns and cities if they wish to withdraw cash, and this means paying for transport as well as any cash withdrawal fees.   

It’s a worrying trend that impacts society’s most vulnerable the hardest, including people who are older, poorer and those who have mobility issues.

Withdrawing money from a cash machine often incurs fees, which can add up to almost a third of one week’s pension over the course of a year.

More than 44 per cent of people aged between 50 and state pension age have at least one long-term health condition, making travel more difficult. Public transport is also less available in rural areas, meaning longer wait times for services and further distances to walk to bus stops unsuitable for people with mobility and health issues.

As more bank branches close their doors, cash-users are put at an increasing financial disadvantage. For the 1.2 million pensioners across the UK who are reliant solely on their state retirement pension and other state benefits, the cost of withdrawing cash from their bank account each week is substantial.

To put it in perspective, the full state pension is £168.60 a week (2019/20). Withdrawing money from a cash machine often incurs fees, which can add up to almost a third of one week’s pension over the course of a year. 

Banks and building societies are institutions that people trust with their money and should be proactive in providing customer service to all customers, not just those confident in internet use. Banks must not wait to take reactive steps to public backlash, but must take greater responsibility for ensuring their vulnerable customers are supported with digital banking, and that those who rely on cash are not left behind.

The State of Ageing in 2019

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Nayyara Tabassum
Evidence Officer