/ Money

Lord Holmes: we must guarantee access to cash

The government cannot leave the cash system vulnerable to further damage. Our guest, Lord Holmes of Richmond, explains the action he’s taking.

This is a guest post by Lord Holmes. All views expressed are his own and not necessarily shared by Which?. 

Is cash facing an existential crisis? The pandemic has accelerated an existing trend towards digital payments and increased discussion of a cashless society. Heavy cash users have traditionally been unlikely to switch to digital payments, but the pandemic has swept away much of that resistance and forced change.  

The use of cash has fallen dramatically, and behaviour change has been driven by both consumers and retailers with a significant rise in online shopping as well as an increase in cashless retailers – including the House of Lords canteen.

ATM withdrawals are down 90% in London. Bank branches are shutting at a considerable rate, five hundred in the past year. Cash points are following fast.

The speed of change

I’m a huge advocate of fintech (financial technology) and support the growth of open banking and digital payments, but I am concerned about the speed of change and the real risk of exclusion. The majority may be happy with a move to a cashless society, but what about the minority who, for a variety of reasons, still rely on cash?

To go back to the data, ATM withdrawals are down 90% in London but just 43% elsewhere. Rural and isolated communities are far more likely to rely on cash. As are small business owners, some people with disabilities, some people on tight budgets or people without bank accounts.

There are millions who, for a myriad of reasons, still rely on cash. Which? reports that 1.9 million rely on cash for nearly every transaction, and eight million who would struggle in a cashless society.

Without protecting access to cash for those who need it, we will exacerbate inequality and turn this country and our communities into a place of exclusion. 

A recent Access to Cash Review made five important recommendations; guarantee consumer access to cash, take steps to keep cash accepted, make radical change to wholesale cash infrastructure, move from a commercial model to more of a utility approach, make digital inclusion in payments a priority and finally have a clear government policy on cash supported by a joined up regulatory approach which treats cash as a system.

Government must act

I’m working hard to promote these recommendations in Parliament. During the passage of the Financial Services Bill the Government, accepted my amendment which enables customers to obtain cash without the need for a purchase.

This speaks to the first recommendation of the review: we must guarantee access to cash, not access to ATMs. There is huge potential for new ways of providing cash access which could both widen access and help keep the high street alive. I think the Post Office ‘bank hubs’ and other community cash access pilots currently underway can also play a huge role here.

The review was also clear that market forces alone won’t make this happen. We need leadership and the government must act

On Monday (19 July) in the House of Lords I will ask the government what plans it has to:

(1) to designate the United Kingdom’s cash infrastructure as critical national infrastructure, and

(2) to introduce a universal service obligation for the provision of cash.

I look forward to the government’s response. I welcome that one of the review recommendations focusses on digital inclusion in payments. Financial and digital exclusion all too often walk hideously hand in hand.

Currently, there is a risk that digital payments innovation could continue to focus on the 80% who are mainstream adopters, not the 20% with various barriers to adoption. Digitally include, financially include and we all benefit – the benefits are not merely economic but social, and psychological.

It’s a challenge, a mission for us all. Let’s play our part and transition together, enabling, empowering, and unleashing potential. 

This was a guest post by Lord Holmes. All views expressed were his own and not necessarily shared by Which?. 

Which? is clear that voluntary initiatives or public commitments can not replace government or regulatory oversight. We need a firm commitment from the Treasury on when legislation to protect cash will be introduced, as the system will continue to be under enormous pressure until it is brought forward.

Cash is a necessity millions couldn’t live without. You can help us protect it by signing our campaign petition.


The epidemic and lockdown has inevitably led to much less use of cash. You cannot use cash when you order your shopping for home delivery, or other online purchases that you would normally buy in a shop. Nor other things you would normally use cash for. I expect this will reverse as we get back to a more normal life, so I think that this argument is a little flawed. And while the value of cash purchases may well have declined there are still a huge number, as opposed to value, of cash purchases.

Rather than raising the spectre of a cashless society – very unlikely in the foreseeable future – we need to take a positive and constructive approach and accept that, as life evolves, things will change. While ATMs and bank branches naturally decline as we choose to use them less and less, we have seen Post Offices taking on the important functions, including giving access to cash.

However, more importantly, now we have left the EU we are able to put a system in place where we can use debit cards to get cash without purchase from cash businesses. Trials are underway and I would suggest supporting a move to this method of accessing cash would be one of the constructive ways forward. In principle such businesses are within easy reach of far, far more people throughout the UK than could ever access an ATM, bank or post office.

I think less pessimism and more practical proposals would be a good approach.

I have not used cash since before the pandemic. Nowadays I use mobile banking to pay friends and am happy to accept online payments too.

I am very much in favour of retention of cash for those who want to use it and fully support the suggestions in the introduction. Sadly, those who live in rural communities have suffered from closure of banks (often accompanied by loss of ATMs) and closure of their local Post Office, government action is long overdue.

Every Which? Conversation we have had on this question has generated hundreds of examples of where cash is essential. While various work-arounds to the absence of cash in a myriad of small personal payment actions have been outlined, none have been regarded as entirely satisfactory and there have been suggestions that the people who advocate keeping access to cash are just dinosaurs who are not prepared to move with the times.

We don’t need to recite these examples all over again now but in most cases the human interaction element plays a very strong part. Functionally, we can all manage without handy access to cash if we have to, but for family, voluntary organisation, leisure and social activities the pleasure tends to turn on the giving and receiving of notes and coins

The government promised a legislative commitment. The coronavirus epidemic hasn’t negated its need. It’s time for action; in fact, it’s long overdue.

Thank you, Lord Holmes. Elementary really.

This is Which?’s take on what is going on in the cash world ( mainly what others are already doing).

In particular ” Cashback without purchase is another important recent development. As of April, the government amended laws** to make it possible for shops, cafes and pubs to offer cashback without you needing to make a purchase first. Many of our speakers were optimistic about the role this could play in the future of the cash network, particularly in communities where access to banks and ATMs is poor.
5. The cash supply network will need to change” As the demand for cash falls, it becomes less cost-efficient. This is because of the costs associated with cash infrastructure, like the production, storage and transporting of cash……..

I hope Which? will now continue supporting new ways forward and, maybe, come up with its own constructive suggestions.

There is no further case to be made for cash; it is quite clear it is a payment method used and needed by very many people. However, when we speak of “legislation” we must be clear that there are sensible means of meeting that legislation. As I understand it some legislation was needed for cash businesses to dispense cash against a credit card, something that was prohibited by the EU when we were a member. It appears that has already been enacted so if the trials prove successful they can swiftly be rolled out across the whole of the UK, include the remote and sparsely populated areas.

**” Holmes put forward several amendments to the Financial Services Act 2021 during its Lords stages.[44] The amendments were related to fintech and financial inclusion[45] and one amendment regarding cashback without purchase was accepted by the Government and passed into law when the bill gained Royal Assent in April 2021.” I am pleased to see the Baron has a progressive approach. Let’s hope so do others.

Even though I’m a big tech fan I’m a supporter of this push on the government. I live in the Cotswolds and have seen first hand how farm shops struggle with online payments. The charges by the bank, even though small, make a real impact on what are already tight profit margins.

Transport for London has decided to allow passengers to pay cash at London Underground ticket offices again. TfL withdrew the option to use money at the start of the coronavirus emergency but it is now returning on a permanent basis.

This is a very good development because it removes a form of justification for other organisations not to accept cash.

Em says:
24 July 2021

London Travelwatch are claiming this is a direct result of their campaigning:

“This news is a huge win for London TravelWatch and all the people and organisations that supported us along the way including … Which? … and many, many more.”

They are also in favour of retaining face masks on public transport.

There is now plenty of evidence that being close to other people, especially indoors, has been responsible for spread of coronavirus but none that I am aware of that it is being spread by handling cash or touching an ATM keypad.

I hope that if businesses don’t want to handle cash they will make that reason clear rather than trying to justify it as a safety precaution. At least face masks do something useful.