Protecting access to cash is vital amid cost-of-living crisis

Handling physical cash is also useful for teaching young children about money to help them develop good financial habits.

Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “While digital innovation has transformed the world of banking, notes and coins still remain important to quite a lot of people.

“There are some sections of society comfortable with the transition to a cashless society, but it is important to cater for the millions who use cash in their daily lives - particularly elderly people and those on low incomes who are cash dependent. Having access to physical cash is critical to the way many people keep track of their spending - which is increasingly important amid the escalating cost of living crisis.

“There is also something to be said about the value of physical cash when it comes to teaching young children about money to help them develop good financial habits from an early age. Teaching young children about the value of savings isn’t quite the same if they aren’t able to see or touch the money they’ve been given.

“But finding an ATM to withdraw cash is a palaver for many as bank branches have been dropping like flies amid the shift to online and mobile banking, while cashpoints are few and far between in some areas. This can be infuriating for those dependent on cash, forcing many to travel unreasonable distances to pay in or take out cash.

“The government also announced that it will set out its expectations for a reasonable distance for people to travel when depositing and withdrawing cash. This is going to be tricky to determine, but both the government and the FCA must consider a wide range of factors such as accommodating for those with mobility and transport issues.”

Key points

• Under the new rules the Financial Conduct Authority (FCA) will be granted new powers over the UK’s largest banks and building societies, to ensure that cash withdrawal and deposit facilities are available in communities across the country
• The FCA’s new powers will allow it to address cash access issues at both a national and local level
• To support the FCA, the government will set out its expectations for a reasonable distance for people to travel when depositing and withdrawing cash.