/ Money

Is your local cash machine no longer free?

We’re becoming more and more concerned about the challenges people are facing to access their cash free of charge. Have you been forced to pay for withdrawals?

We know that people pay for goods and services in a range of ways, but many of those who want to withdraw cash from a cashpoint are now being faced with fees just in order to access their own money.

Which? News: 1,250 free ATMS start charging fees in just one month

We started by asking our supporters whether they had been affected by this worrying trend. Robin from Kirkcaldy told us:

“I stopped using the local cashpoint when it started charging me just to access my cash. I’m on a very tight budget and can’t afford to be spending out just to get the money I need for everyday life”

While Anita from Blackpool said:

Being disabled means I don’t have the option of walking to the next free cash machine, so these charges shut me out of cash that’s important to my daily life. My town has also suffered from bank branch closures, making it hard to access the cash and financial services I need”

In fact, more than 1,000 supporters got in touch on this issue and shared the impact that charging cashpoints had had on their lives.

💷 Half of respondents said they faced fees of between 50p to 99p

💷 Almost a quarter said they were having to pay between £1.50 to £1.99

💷 83% of respondents said they would no longer use a cashpoint that had converted to fee-charging

Rapid changes to access

We decided to investigate further and discovered that from January to March 2019 almost 1,700 free cashpoints across the UK switched to charging, with more conversions planned.

There can be no doubt this will have an impact on people’s ability to access their cash free of charge.

These rapid changes are resulting in people having to travel further to access their cash free of charge, pay to get their cash out, or they are being forced to use alternative payment methods.

While digital payments are on the rise in the UK, there is still a real need for access to cash, with 2.2 million people almost entirely reliant on it in their daily lives.

These kind of negative consequences were inevitable with decisions on the cash system being made by multiple regulators and organisations; and it’s the consumer literally paying the price.

People shouldn’t have to pay

We don’t believe it’s fair that people should have to pay a fee before they can access their own money, but how do you feel?

Our Freedom to Pay campaign is calling on the Government to appoint a single regulator to oversee the whole system and protect people’s access to cash while it is still needed.

You can support the campaign by signing our petition and adding your voice.

Has the cash machine in your area switched from free to charging? Are you prepared to pay every time you wish to withdraw cash?

Comments

At the present time the Link website homepage carries the headline:

10 YEARS OF IMPROVED ACCESS TO CASH
How we have helped to introduce free-to-use ATMs in nearly 1,900 areas across the UK

It does not surprise me that Link has omitted to tell us about the forthcoming imposition of fees for using machines that are currently free to use.

Why introduce charges for using ATMs when those who are in credit don’t generally pay a penny to use other services such as online banking.

I could probably manage without every having to use an ATM again but it concerns me that those who cannot or don’t wish to might soon be hit by charges to withdraw their money.

These commercially-provided ATMs, supported by LINK interchange fees (that are only reducing by 1p a year at most) are installed to make a profit for the providers. If they are not used enough then their capital and servicing costs need to be recovered somehow or they will be removed. Whether we like it or not that just seems a consequence of a change in consumer habits.

As far as I know this should only affect machines that are relatively local to others as the LINK scheme attempts to preserve free “protected” ATMs that are more than 1km apart by offering much larger interchange fees.

However there will be millions of people who live well out of walking distance of an ATM, and never have had that convenience. I’d like to see constructive proposals made to improve access to cash for as many people as possible, not just to preserve what exists. I believe other means of obtaining cash would be available with some positive thinking – from cash based business like shops, pubs, cafes….. who take in cash as part of their trading.

LINK says:
”The continuing adoption of new payment methods is reducing the demand for cash and therefore ATM withdrawals. The ATM deployment market is responding by reducing the number of free ATMs independently of the interchange reduction. LINK’s commitment is to ensure that coverage of the network is not reduced as a result of the changes made to interchange. We are also working to maintain coverage as a result in the decline in consumer demand, although ATM management and deployment is a matter that goes beyond LINK’s control alone. Protecting the level of interchange, and in some cases increasing the interchange payable, on machines in more remote and rural locations will help to ensure that these ATMs do not close. A reduction in interchange rates in busier urban centres has also been made as there is an over-provision of machines in some of these areas.

LINK has put in place specific arrangements to protect free-to-use ATMs more than 1 kilometre away from their next nearest free-to-use ATM. LINK is targeting all of these free machines in more remote and rural areas to remain open to preserve coverage, unless there is another source of cash access available or no consumer impact from closure. In 139 of these locations (click here to view), the free-to-use ATM is closed or has switched to surcharge (119 reported last month). 104 of these 139 locations have alternative free access to cash from the Post Office, relate to ATMs that were not in any case already accessible to the general public, or have security issues that make the site unsafe. The remaining 35 (27 reported last month) need replacing with another free ATM, and subsidies to open a new ATM will be provided by LINK. This report gives full details.

The only time I use my local cash machine is to change PINs on new credit cards, which is quite a rare occurrence. It’s inside a shop and looks like a chargeable machine, but surprisingly charges nothing to withdraw cash. I haven’t used cash in the UK for over 4 years.

Like most Londoners, I have no need for cash. It’s odd that it’s Londoners who have the most free cash machines and don’t want cash, whereas those with the fewest free cash machines are in the countryside who do want cash.

As the number of cash withdrawals goes down and the fixed costs of operating cash machines remain the same, it is inevitable that the cost per withdrawal goes up, meaning that the fee paid by the card issuer to the cash machine operator no longer covers the cost of operating the cash machine, necessitating an additional fee to the card holder. Those who insist on using costly methods of payment should be prepared to pay the costs of using them. Cash is expensive to handle. The same goes for cheques, for which I believe the drawer and payee should both be charged rather than being subsidised by the majority of bank customers who stopped using cheques years ago. Look at Scandinavian countries, where hardly anyone uses cash or cheques. They have moved on and think outside the box instead of stubbornly refusing to change their ways.

It is possible to live a cashless life in the UK. Therefore I don’t see the problem with being charged for cash. A far greater problem is countries where UK residents visit, for example Thailand, where foreign cards are unreasonably charged for withdrawing cash, e.g. THB 200 (almost £5) and many businesses accept only cash. When looking at fees for withdrawing cash, I believe that Which’s focus should be on countries where UK residents need to use cash rather than at home where one can live very easily without cash.

I wonder how many people follow NFH’s example and live a totally cashless UK life?
Sweden? One survey by the Swedish polling firm Sifo last year suggested that seven out of 10 Swedes still want the option to be able to use cash as well as cards and apps.“.
https://www.weforum.org/agenda/2018/11/sweden-cashless-society-is-no-longer-a-utopia/

Plenty of examples have been given in these Convos of where many believe cash has a place, usually for small transactions. I support those.

Why is cash more convenient for small transactions? For example, pay 51p with any banknote and you will end up with at least 9 coins in change, whereas paying it with a card results in no annoying change.

If consumers really need cash for small transactions, then I’m sure they could withdraw £50 to £100 from their own bank’s cash machine once every few months, saving costs for both their bank and themselves.

DerekP says:
1 May 2019

I don’t like to have to carry coins around with me, so I definitely prefer to pay small amounts by contactless card.

Hi folks,

Thanks for taking an interest in our new push on cash access – I know this has sometimes been a controversial topic on Convo!

I’m pretty close to living cashless myself. But what I’ve found really eye-opening is how much cash is relied upon by some of society’s most vulnerable: those on a tight budget or people with disabilities.

There’s a definite risk that a small but significant minority of people will be left behind if we carelessly drift towards a cashless society. The example of Sweden is a good one, where there is now a real concern that they moved too quickly away from cash without thinking out all the consequences.

If someone is on a tight budget, how does cash help them more than an app-based account with a real-time balance and no overdraft facility? It’s much easier to see how much money one has with a numeric balance than counting notes and coins, and many of these app-based accounts having budgeting functionality, which cash doesn’t have.

People on a tight budget might not have a smart phone or feel comfortable trying to use an app or operating a budget or accounting system. Counting money does not take long and people can take with them each day as much as they wish to use. In my experience, people who use cash seem to know much better than most how much money they have. If it’s what people like doing, why try to change them? I think we’ll still be using cash in thirty years’ time – and it looks like we should because it might be the only way to keep our bank branches open.

There are a fair number of people who don’t have a bank account. I don’t know how many would not even be allowed to have one.

Perhaps we should just let people have a choice of how they manage their money. We could even do what Josh has done and find out the consequences for vulnerable and disabled people.

At least 28,000 were deemed insolvent in the first quarter of 2018, which seems to be a rising figure, so we could, I assume, extrapolate that to suggest perhaps 100,000 new bankruptcies per year, which could mean almost half a million people won’t be allowed bank cards, have their accounts frozen and will have to depend on the goodwill of their own bank to allow them to use or open a new but extremely limited account, if at all.

I’m not sure that the likes of Revolut and Monzo mind if a new customer has been declared bankrupt, particularly where the debit card is prepaid and doesn’t allow any borrowing.

Many people who are disabled and vulnerable are entitled to claim disability benefits payable by the DWP through an account card issued to them for access to cash either from their bank or their bank account via their post office or their post office account.

However, with the imminent closure of post office current accounts in September this year, claimants will still be able to access cash using their designated bank account card from their local post office, which would most likely also house an ATM.

You are required to open a bank account or a post office account before all disability benefits are payable by the DWP.

DerekP says:
2 May 2019

Indeed. Most folk I know on benefits have no problems getting accounts – their problems are more to do with having enough money to put in them. This then gets further compounded by the rip-off fees they have to pay for so-called “un-authorised” overdrafts every time they can’t quite make ends meet.

The way to deal with overdraft fees is, with a decent bank, to arrange an overdraft limit. It seems the responsible way to treat your account.

Should banks simply remove the unarranged overdraft facility and require anyone who wants to borrow money to request an overdraft facility and have the request hopefully approved if they are a suitable candidate

Very true Derek, and the lengths they have to go to acquire the paltry sum they receive is pretty intrusive and intimidating.

I think when public money (yours and mine) is being distributed it is important to ensure the right amounts go to the right people.

DerekP says:
2 May 2019

I get what Malcolm is saying about overdraft limits, but I know people who have tried to do that but still end up overdrawn. The problem is that it is not really in the banks’ interest to keep their customers out of debt.

Indeed; many people find the almost insultingly low overdraft limit the bank affords them is inadequate, possibly only on one or two days a month but that’s all it takes for the banks to levy extortionate charges.

I agree Malcolm but if you were unfortunate enough to suffer from severe mental incapacity, completing a 49 page questionnaire, you may find, is no easy task and only adds to the mental confusion and uncertainty that already exists in the minds of people with this illness.

On the other hand, if you are in a position to be able withdraw cash using a bank accounts card, most receipts will clearly display your current balance, or if not, the option to do so is available at most ATMs.

It may not always prevent you from going overdrawn but it can be a useful deterrent to assist you in the management of your own finances and helps to protect you from extortionate bank charges.

What “insultingly low” limit? I know someone with no income from work or benefits who has an arranged overdraft with a limit of £900. Hardly low.

I do not see anyone as automatically entitled to money, and certainly not without permission. It is not the banks’ job to make supportive payments unless the customer can repay without harm – which is why I am in favour of arranged loans and overdrafts; why should a customer avoid this? I do “blame” the banks for allowing unarranged overdrafts. They will inform you by text if an impending payment will take you over your limit to give the opportunity to move funds.

I am concerned with how easy it is to obtain a so-called “payday loan” when, as with this person, there is no pay day nor any hope of repayment without further debt. £150 loan, repay £184 in a month.

The state is there to provide financial support to those genuinely in need (as well as to waste our money compensating ferry companies).

malcolm r says: Today 11:16

What “insultingly low” limit? I know someone with no income from work or benefits who has an arranged overdraft with a limit of £900. Hardly low.

I agree. I wonder, however, when that was arranged, and how anyone with no income from work or benefits manages to survive?

I do not see anyone as automatically entitled to money, and certainly not without permission. It is not the banks’ job to make supportive payments unless the customer can repay without harm – which is why I am in favour of arranged loans and overdrafts; why should a customer avoid this?

I agree with the first part of what you’re saying, but not the final bit, where you’re conflating two separate issues. No one is asking for the banks to make ‘supportive’ payments, only to behave in a more reasonable manner than their performance hitherto suggests.

No bank manager is going to agree a £900 arranged loan unless he is assured of its return within an agreed period of time.

There is however a marked difference between someone who obtains money from a bank, cap in hand, which could be due to a number of reasons not pertaining to ones health, and Incapacity Benefit which is. It is the process of obtaining that Benefit that can be a demeaning and undignified experience for people who through no fault of their own are in genuine need of financial help.

Most tax payers would, I am sure, be happy to agree for their contribution to go towards helping their fellow citizens in need, especially those, all too aware, they could one day find themselves, or their loved ones, in a similar position – but would find acquiring that help quite a daunting task.

Agreed.

I found it very demeaning when I asked for a credit limit increase on my bank credit card that I had kept low on purpose. There was a substantial amount in my current account at the time and the interrogation surprised me somewhat. If that is how they treat someone who is reasonably solvent, I dread to think how they treat someone whose finances are not in good shape.

There is something rather warped where banks are happy to dish out rather large fraud repayments when someone has done something stupid but impose unfair charges on those struggling to manage their finances.

Information that is missing is exactly where these free ATMs are disappearing from. Are they not too far from others? Are they protected ATM’s? Is there no other free access to cash – like cashback, a post office for example, nearby?
@morganvine, Morgan, perhaps Which? will include such relevant information in future?

Yes Malcolm it is possible to access free (at the moment) cash from your local Post office. You can for free:

Withdraw cash from your bank account

Deposit cash or a cheque into your bank account

Bank balance you can check your bank balance

Most PO branches are now operating in local convenience stores and have ATMs, operated I believe by The Bank of Ireland.

To read more: post office.co.uk – Branch Banking – Personal Accounts
And/Or: http://www.postoffice.co.uk/everydaybanking.

(The latter website includes a list of all the high street banks participating in this system)

Hi Morgan – You make a good point about ATMs running out of cash. I’m finding this an increasing problem despite the decline in use of cash. That’s not a problem in a city centre but not good if the next one is miles away.

I could infer from your reply that areas are not being left devoid of free ATMs and also that protected ones, and those in deprived areas, are little or not affected or there are alternative cash sources available. Is that a fair inference?

If people use “the remaining free cash machines” more then that is a good thing – increased usage will help protect them from closure. They are not truly “free” as they still attract interchange fees – the more who use them, the more interchange fees will be paid, the greater their income and that hopefully keeps them commercially viable.

Having looked at the Link ATM locator I see that some of the ATMs in the area charge between £0.95 and £1.95 per withdrawal, though most are still free to use.

I am going away soon and see that the nearest two ATMs charge £2.95 per withdrawal. 🙁

The LINK website will show where there are fee free ATMs. Stock up with cash at one of these. There are far more free machines than those that charge.

Perhaps Which? could look at where the only ATMs remaining in areas are fee charging with no other sources of cash. If the LINK map is up to date a trawl through that would be a tedious way, or perhaps just ask LINK. I’d quite like to see the relevant information.

To me it seems odd that people will generously support mega media corporations with large dollops of money in order to stream and download entertainment every week but will jib at having to pay a small sum in order to release some cash from their bank which has been holding it securely for them free from loss or pilferage and providing a range of other services of great usefulness. I acccept that it might not be the same people in both cases, but it’s a reflection on society’s priorities.

For modest cash requirements a monthly withdrawal would probably be sufficient and I believe most people could organise their life to enable a visit to a free ATM once a month at least when visiting a town centre or doing their main shop.

As LINK runs a Financial Inclusion Programme to ensure that all consumers have free access to cash it seems odd that Which? do not link to their work directly when discussing ATMs. The information LINK provide seems very relevant to me.
These links may be of interest to some:
https://www.link.co.uk/media/1424/v-96-link-scheme-ltd-change-control-method4-change-2019-l041_19-atm-footprint-report.pdf
https://www.link.co.uk/initiatives/financial-inclusion/

We live in ever changing times, moved on by technological innovation and with the added facility and increase in the use of contactless and other cards, ATMs are slowly being phased out in favour of card purchase as the decline in the need for cash proceeds inexorably to its demise.

There will inevitably be casualties along that journey and some will need a little help along the way, but I sincerely hope the changes will continue at a pace that will enable the vulnerable to adjust to new methods of coping in a society that seemingly is unable to halt its slow but sure progression towards a cashless
society.

I have never needed to use a pay-to-use ATM. I have never paid a credit or debit card surcharge fee and have even had surcharges waived when they have not been shown in details of payment methods. If I do have to pay then I will accept that because I’m not going to drive miles to find a free ATM, any more than I would drive miles to find a cheaper filling station.

However, thinking about those who are struggling – perhaps living on the state pension – having to pay a couple of pounds to withdraw money from an ATM would further strain their finances.

In the introduction, Morgan asked if we pay to use ATMs. I presume that the answer is know for most of us, while NHF and Derek have little need. It would be interesting to hear from anyone who is paying for withdrawals on a regular basis.

I would never pay to use an ATM on principle.

My local village store and registered Post Office has a free to use ATM but if it switches to fee paying I will use my bank card to get free cash from the PO counter.

I think it’s similar to charging for plastic bags Wavechange to stop people from using them, the difference being one has a positive impact to help save the planet, the other is a negative inducement to save the financial services at the expense of the consumer.

I’m not planning to pay to use an ATM either, Beryl. I can make more use of cards if faced with charges, but if most of us do the same there will be less reason to keep ATMs for those who need or want to use them. Maybe we could give poorer pensioners passes to obtain their money free of charge, that would help. You are lucky to have a Post Office counter because ours became a delicatessen.

I’d like to know why we are going to see more ATMs that charge, yet other banking services will remain free of charge for current account holders that remain in credit. It looks as if the move to the cashless society is stepping up a gear.

Presumably it is not banks that are providing ATMs that charge, but commercial operators. If so, then bank services remain foc. Perhaps Which? would tell us more facts about ATMs.

They are gradually being phased out Wavechange 🙁

I read that half the Post Offices have gone since the early 80s. 🙁

They have all moved into the local store, including the Co-op 🙂

Seems reasonable and they generally offer banking services for most banks. About 11500 POs, where cash can be accessed for free. However I believe there are many more cash businesses that could be incorporated in a national scheme to dispense cash and help far more people than are currently served by ATMs. Now that would be progress.

One theory, as more elderly are shopping online at supermarkets for their food supplies which involves opening an account, they could offer a cashback system as they do when you visit the store.

PS Why do I need to log on with each new comment?

I used to live three or four miles from an Asda branch that incorporates a large Post Office open seven days a week, to 8pm on two of the days. I used to tax my car there before it was possible to do this online.

Can someone provide evidence that it’s cheaper to pay someone to dispense cash than have machines to do this? If that’s the case, why have I been using ATMs for over 40 years?

Beryl – Try restarting your browser. I had the same problem recently. Your avatars have reappeared so someone must be working late at Which? 🙂

Its probably down to public demand and the ever increasing need that coincides with disappearing ATMs. I was unaware until quite recently that POs had become agents for banks!

No stranger, perhaps, than supermarkets doing eye tests, running a pharmacy, cutting keys and selling petrol. I expect that supermarkets will keep free ATMs unless the the banks are determined to turn us into a cash-free nation, or nearest offer.

I have just been on a business trip to Oslo. A Brit working at my client has been living in Oslo for 8 months and he says he’s never seen Norwegian cash. Everyone pays with cards.

Why do UK residents, particularly outside London, cling on to the past instead of modernising their ways? It’s time to embrace technology and use more modern means of payment.

There have been plenty of replies to this question in the convos.

I know, but it comes back to the same issue, which is that many UK residents prefer to live in the past and are too stuck in their ways.

I think many have given sensible reasons, not based on obstinacy. However, we simply need to consider all people and all their views.