/ Money

Do you still need your local bank branch?

Bank signs

As talks take place about how to deal with closing bank branches, it might be wise to think about how you do your banking. Will you need to adjust your banking habits?

For many of us, a bank branch is part of the backbone of the local high street. My own beloved Deptford High Street has been the home of some of the banking industry’s biggest names over the years – along with what is surely South London’s greatest burger van.

But with changes to what we have regarded as ‘typical’ in high street life – the butcher, the baker etc – the local bank branch is now under threat. Back in 1990, there were 17,991 branches on the high streets. Over the years we’ve seen their numbers fall and by April 2015 another 142 will close, leaving just 9,081 in the UK. This will undoubtedly raise concerns for smaller communities who may lose their face-to-face banking service.

Vince Cable is currently in discussions with the banking industry and us at Which? about how best to manage the decline in branch banking. The question is, if branches close, how will people access physical banking services?

Changes in banking habits

It is undeniable that people use branches less, with some banks reporting footfall declines of up to 30% over four years. Lloyds for example gave up on its pledge to keep its branches open wherever it was the ‘last bank in town’, blaming a faster than expected fall in usage.

This is partly driven by developments in personal banking, such as telephone, online and mobile banking, which for many make the local branch less of a lifeline than it once was. Royal Bank of Scotland recently claimed that its most popular branch was the 7.15am to Paddington because so many people use its mobile banking app. Banks also point to the role of the Post Office in providing an alternative to branches.

Looking after all customers

Yet, there’s no denying that online and mobile alternatives aren’t for everyone, while the information provided by banks over the phone has repeatedly been shown to be patchy at best.

Inevitably, there will always be customers who want to do their banking face-to-face with many of those who value their local branch being people who simply aren’t comfortable conducting essential financial transactions online.

We don’t think banks should leave their customers high and dry when branches close. Banks must keep their promise to maintain vital banking services for all, particularly for the most vulnerable. We’ll continue to make sure your voices are heard by the Government, industry and regulator.

Do you still use your local branch? If it was to close, what alternative banking facility would you like to see?


I visit my branch to pay in cheques. Usually I just put them in an envelope with the paying-in slips and post it through the door when I’m passing.

It is comforting to know that if I had a problem I could talk face-to-face, rather than have to deal with a call centre.

I can understand why banks are closing branches but in the same way they share cash dispensers, perhaps they could find a way of running a branch that served all the main banks. For many years the Midland bank on the campus of the university where I work did offer some shared services. The university had made this a requirement and it worked well.

Oops. That should read where I worked, not work. The branch has long gone, but the idea of shared services was well liked at the time.

The last time I received a cheque, I paid it in using the Barclays Mobile Banking app, just by taking a photo of the cheque with the app. Hopefully this will become widespread so that those who insist on using this archaic method of payment no longer create such an unreasonably onerous task for the payee.

NFH, what would you replace the cheque with for the many you don’t use online banking?

I’m certainly keen to pay in cheques online, NFH. You did mention this before.

Malcolm, I didn’t say that cheques should be replaced, but that we should have a non-onerous way of depositing cheques. Receiving a cheque is a real pain, unless one can deposit it with a mobile app.

Now you come to mention it, I do believe that cheques should be abolished, but that’s another topic.

Well at the risk of being contrary, I am very happy to receive cheques of any amount and at any frequency. I find they lead to an enormous improvement of my relationship with my bank.

John, don’t forget why many organisations issue cheques instead of bank transfers. I can’t find the statistic, but a huge proportion of cheques issued are never deposited because the payee finds it too onerous; time is money. No business, especially a large one, should be issuing cheques in this day and age. It is a disingenuous practice, designed only to reduce an business’s outgoings based on the statistical likelihood of payees not bothering to deposit them.

I agree with you on commercial cheques. Most of the payments I receive go straight into my bank account [and straight out again it seems some months!] but there are all sorts of miscellaneous personal cheques that have to be paid in and I am diligent about doing it. ERNIE occasionally favours me with a paltry win which has to be paid in, and from time to time I organise dinners where people have to cough up their portion and they usually give me a cheque – and then I have to send a cheque to that night’s chosen charity. I use quite a few cheques each year to pay independent tradesmen where the amount involved is more than you would normally have in cash; the central heating engineer needs a cheque for the annual service and I’m always sending off for books and music from odd companies who I don’t necessarily want to have my card details. So, in my case, the need for cheques shows no sign of diminishing at the moment. Luckily, because nobody can think of a practical alternative, they will be around for longer than me I expect.

ACDL-W says:
13 February 2015

I agree

John, none of the scenarios that you have quoted requires cheques; bank transfers (or Paym or Barclays Pingit) would be more suitable.

1. Premium Bond winnings are credited automatically to my bank account. Why would I want to receive an onerous cheque?
2. If I need to pay a tradesman, why would he want to receive an onerous cheque that he has to take to the bank, rather than a bank transfer before he leaves my home?
3. If people owe you money for dinners, then why can’t they do a bank transfer?

Most use of cheques is through stubbornness and aversion to change or modernisation rather than a lack of a suitable alternative.

Living in London, I know a lot of foreigners who have settled in the UK. None of them have ever used a cheque and they can’t understand why British banks issue them with a chequebook. In other countries, cheques are unheard of except for something that one’s grandparents used to talk about. Why do we in the UK, unlike other European countries, need to hold on to this archaic form of payment?

NFH, agreed there are many occasions when alternative methods od payment to cheques can be used. Hiowever, I think you may be overlooking the many people who do not use mobiles or PCs for online banking – either from choice or lack of ability. I. am neither stubborn, averse to change nor “modernisation” yet still find uses for cheques – like many others on this and the previous conversation. The proposed removal of cheques was overturned by a clear need. As they are here to stay we should now be concentrating on improving the current system or finding an alternative with similar benefits.

I hope it catches on too. It virtually removes the final reason for me having to visit a bank ever again.

Well said Malcolm. It’s vital that companies cater for all their customers and as I see it, there is still a clear need for banks to provide convenient branches. For many years, customers of different banks have been able to use the same cash dispenser, which is convenient for the public and presumably acceptable to the banks.

Bank branches offering shared services could be the way forward to provide local banking facilities while minimising the costs for individual banks. I would also like to see shared depots for collection of undelivered parcels, but that’s more appropriate for another Conversation.

Can anyone explain why the UK needs to retain the cheque system, whereas other European countries abolished cheques years ago? What is different about the UK that necessitates this archaic form of payment? I keep hearing about old people, charities and tradesmen but these all exist in other European countries where there are no cheques.

If we were talking about the US, then there would be a reason. Unlike most developed countries, the US has no high volume system for low value payments, such as FPS or BACS in the UK. Therefore the US banking system relies heavily on cheques, and if you send a payment by online banking in the US, your bank sends a cheque in the post to the payee! But what is unique about the UK, compared to the rest of Europe, that necessitates the retention of this archaic form of payment?

NFH – We have discussed this on numerous occasions and I have given you a very good example of why we need cheques. Others have given different reasons, including the fact that they WANT to use cheques. I don’t know how small charities manage without cheques in other countries, but it’s irrelevant because there is no doubt we need them here for the foreseeable future. Small traders often ASK me to pay by cheque even if I offer to make an electronic payment.

It is not reasonable to expect people to carry around a lot of cash, certainly in some parts of the country.

This still doesn’t explain what is unique about the UK that necessitates cheques which doesn’t exist in other European countries. I think it’s down to stubbornness and a reluctance to embrace modernisation.

Perhaps those in the UK are good at rejecting what we are asked/told is the best way forward. A relevant example is of course the decision that cheques still have a place in financial transactions.

Many of us don’t have a lot of faith in the banking sector and if cheques are withdrawn, that will not do anything to generate trust.

I read that Europe uses a Giro system still – is that true? These are still paper-based payments. Naturally all such methods are declining because of debit and credit cards and online banking, but there seems to be a residual need amongst a significant number of people who do not, or cannot, use electronic systems. How do we cater for them?

At the moment, I’d say use online banking. You can use it from your smartphone and soon pay cheques in with it too.

terfar, this ovelooks all those people who don’t have smartphones or don’t, for whatever reason, have the facilities or wish to use electronic banking. Do we abandon them? Why should we?

You won’t be abandoned completely, but you may have to travel a fair way to find a high street branch of your bank.

Banks have invested heavily in home and mobile banking because it saves them millions in bank staff and maintaining real estate. A relatively small branch with just 5 staff may cost well in excess of a million a year to run (wages, rip-off rent and rates). So they will no longer be interested in providing free banking in every little town or village: they move with the times. Business is cutthroat and it is their bottom line profits that matter.

So there will be a few high street banks that you will still be able to use, but they will become few and far between in order to cut costs. The majority of people are more than happy to use home banking and cash machines. I don’t see that trend being reversed.

One of the reasons that I put my cheques and paying-in slips in an envelope and deposit it in the letterbox is that I’m fed-up waiting in a queue. There is plenty of demand for banking services round here.

I always use online banking for preference but I have to deal many cheques on behalf of a charity.

Perhaps pay the banks’ senior staff a bit less and we might manage to keep more of our branches.

But why won’t small traders accept electronic payment? They simply give an invoice (which includes their bank details) and you pay electronically using the invoice number as the payment reference. The money will be in their account before they get home. Then both the payer and payee have a permanent record of the transaction. It’s just a luddite attitude to demand a cheque.

I haven’t the faintest idea why they want me to pay by cheque. I ask if they would like me to make an electronic payment, card or cheque and some of them opt for the cheque.

One success has been the local branch of a well known print and copy shop, which will now accept electronic payments. They still don’t accept credit or debit cards.

That reminds me that I should order a new cheque book because I’ve sent in an order to a small local company and might need to pay them by cheque. I don’t mind because they have not increased their price for years. If loyalty still exists in business, it seems to be with small companies.

A new chequebook? How many chequebooks do you get through? Mine is so old that the year is prefixed with “19”. The only cheques I’ve had to write since the 1990s have been to the DVLA to pay the £80 fee to transfer number plates. For some strange reason it’s the only method of payment they accept for this process.

Having chequed, I have on started in 2006 and one started in 2013. I don’t use a lot of cheques.

That means I have no need to order a cheque book but I do need another paying-in book. It’s convenient to order one online rather than going to the branch. When I was a student I had to go to my branch and wait for a cheque book to be printed and I there were no pre-printed paying-in books.

I don’t understand why UK banks issues chequebooks for free, given the high cost of operating the cheque processing system. There should be a charge both on the cheque writer and on the cheque depositor. Otherwise the majority who don’t use cheques are subsidising the minority who do.

I don’t see the problem. Those who have no need of branch services can use banks that do not offer them. Those who need these services or would prefer to use them can use banks that provide them. It’s as simple as that. I encourage friends to try electronic banking, because it is easy.

Thankfully those who run our high street banks recognise that different customers are looking for different things in personal banking. In general, companies are there to serve their customers and not the other way round.

France still has cheques, and for example the tax office there accepts cheques. I don’t know about other European countries.

Shared services on our hight streets seems an excellent idea.

It seems to be what the agreement between all the banks and the Post Office has produced. I haven’y had to use the service, so no first hand experience, as both my banks have accessible branches..

We have created this situation by using on-line banking, credit and debits cards, direct debits, over the years and on the positive side, for many of us, has produced a far more convenient service. We rarely use our local branch – cash machine handles notes out and cheques in and our laptop does most of the rest. However, there are odd occasions when a face-to-face discussion is invaluable, as when resolving a difficulty, looking at best ways to securely transfer a large amount, talking about the pros and cons of a new account, and depositing substantial cash funds (rather than dropping it in a drawer). I support the shared-facilities idea (although the Post Office offers a partial service) particularly where you could book an appointment with a bank official.

Malcolm R

I’ve been with First Direct since its inception (in fact I previously joined HSBC – not in Switzerland though – back in 1970 when it was still the Hong Kong & Shanghai Banking Corporation) and have managed to do virtually everything online. Today, you can instantly transfer up to £100,000 to a recipient in another bank (that uses the fast payment system – FPS) or £1,000,000 to another FD or HSBC account holder. So even the largest of transfers can be handled without the need to visit a bank. I have even transferred money, that was a charity donation, to a school’s bank account in a remote area of India – which they did for free.

Hopefully, online cheque payments will be with us all soon.

Fascinating to see the facility that HSBC has for transferring large sums of money quickly.

This conversation is long on the wonders of on-line banking but can we have a thread on the security breaches that occur all over the world with companies that hold data.

Because of the extent of the discovered flaws in pretty much every operating system and programs to date can we also have a separate thread on the security holes – my reading suggests around 2 or 3 major ones per month.

And perhaps a third thread accounting for all the reported finacial losses/stories resulting from on-line banking.

Seems only fair that people who are being seduced by the ease of use aspect are also informed of the downsides of this cheap and profitable bank system.

As for cheque use I think someone has rather mislead the thread regarding cheque use in Germany, the common system for years has been Giro.

“A major distinction between a postal giro model and a banking model which remains is that, in the postal giro model, an individual can directly transfer money into the bank account of another, provided he or she has the recipient’s bank routing code and the account number. There is no need for the recipient to approve or acknowledge the transfer, and no need for the recipient to visit the bank to claim it. Consequently, cheques are almost never used in countries with extensive giro networks, such as Germany and the Nordic countries.” Wikipedia

Perhaps adopting another continental system would be good.

P.S I work in a small shop and we only deal in cash as it has a very small turnover so the added expense and complexity of signing up and paying an on-line payment processor is avoided.
We are located next door to a bank which means cash is available to those who need our items.
We also do take cheques from know customers and those using the mail order system.

I rarely need to visit a bank and that is usually because one of my luddite friends can’t / won’t simply transfer the money direct into my account, so I need to pay in a cheque.

I’d be delighted if banks and cheques disappeared from the high streets with maybe just one (generic) bank per town.

Slightly off-topic, but I would like to defend cheques on behalf of the many small charities in the UK. Working for a small charity, I frequently receive donations of around £200, sometimes in cash and sometimes by cheque and sometimes a mixture. Few would be happy to pay in advance and we would probably lose a lot of income if we suggested paying after the event. It has to be at the time when our customers have enjoyed their day out. I try to avoid paying cheques myself, but often I’m asked for them by the printers our charity uses, even if I ask for account details and sort code.

Though I don’t want to use cheques, I see a continued requirement until someone comes up with a practical way of making payments from one person to another – in a field, on a river or up a mountain. Cash works, apart from the obvious problems.

It seems as if I am condemned to pay in cheques at my bank for the foreseeable future but I appreciate Malcolm’s suggestion of using a Post Office. A new one opened near where I live. Unlike my bank, there is convenient parking nearby.

But online payment of cheques from your smartphone will soon be with us. Then you will only need a phone signal to pay in your cheques. The tops of some mountains do have coverage!

First I’ve heard about that, terfer – how very modern! 😀 The Telegraph has a good article about it, too:


And what if you don’t use a smartphone?

Good point, Malcolm – There’s those who don’t have access to a tablet or mobile device… I’d be interested to know what the banks will do to help those individuals (if it actually goes ahead…).

Online payment of cheques does not eliminate the need for cheques, just a trip to the bank or paying them in, or sending them by post.

I do have a smartphone but I do not yet trust phones or tablets for use in financial transactions. If I pay in cheques online it will be using my computer. I have been online for over 20 years and not encountered a virus or any other malware on my computer, so I’m happy to use that for financial transactions.

Frankly, collecting by cheque is a very poor practise for a charity. It defeats the extra that Gift Aid that the Treasury would provide – a whopping 25% extra for free. That’s one of the reason I would NEVER give to charity at the door or in towns. As the saying goes, don’t look a gift horse in the mouth.

As I said above, the only options to collect on the spot is by cheque or cash, but we don’t miss out on claiming Gift Aid.

The charity work that I’m involved with uses Gift Aid forms and our customers are invited to complete one when they make donations by cheque or cash. There is also the Gift Aid Small Donations scheme for amounts up to £20. That allows a charity to claim Gift Aid on undeclared amounts up to £5000 per annum, giving an extra £1250 in Gift Aid. HMRC provides templates for Gift Aid declaration forms. I have customised one of these and get pads of 100 forms printed and bound by a local printer. Unfortunately, they expect to be paid by cheque. 🙁

Like you I would never give money in the street or at the door, but I do support charities in other ways.

It’s good to know that HMRC has improved the Gift Aid scheme so that you can collect using Declaration Forms and that they give you extra aid to cover those donations that may not have used GA.

I have to admit that I am a bit of a luddite in that I won’t try the Touch Pay system with my mobile, even though my phone has near field communication and FD operates the system. I keep WiFi, Bluetooth and NFC off when I’m out and about!

We need something as it is increasingly difficult to talk to a consistent person at the bank when there is a problem, or to discuss options with someone as call centre staff can be really unhelpful and sometimes quite ignorant too. It is hit and miss who you get to speak to. Then again there are limits to what the branch can do also.

Sometimes we do need them to pay in cheques or in other emergencies. For example I recently was v grateful to find and HSBC branch when I stopped for lunch in Epsom en route to an appointment and could not locate my purse. With no money to pay for parking, lunch or petrol and no cards etc I was able to get cash over the counter in branch. I would have been truly up the creek without them.

We need to be careful of not losing what can be a vital service sometimes!!!

Given the previous conversation on Trustees and Banks it would appear vital that there is a real live presence available.

The only purpose for which bank branches are useful to me is for withdrawing or depositing large amounts of cash. Other than this, everything else can be done via distance banking, which is more convenient both for the bank and for me. As I very rarely need to do large cash transactions, branches are almost useless to me. However, my nearest branch is probably the last one that will ever close, as it’s head office. So I’m not worrying about it.

No, I have no need for a local branch. I increasingly find branch staff provide poor service, always unaware of their customers individual circumstances, inflexible, and all too often ignorant of their own banks products and services. I can do everything on line.

Branch premises make better bistros and bars. There I can meet with friends.

Having recently been dealing with a relative’s estate I’m not sure how I could have done some of the financial matters without going to the local branch. It would have been very inconvenient and expensive if I had had to go to the chief office or a regional banking centre.

ACDL-W says:
13 February 2015

As indicated above many private individuals use there local bank on fewer and fewer occasions but for any business that handles cash the need to be able to bank it locally is vital.
The further one has to travel to lodge cash at the bank the greater the chance of something going wrong.
The attitude of banks seems to be that they want to abolish cash because they earn much more money by handling card transactions. The general public seem to be totally oblivious of this.
I always try to carry enough cash so that all small transactions are paid in cash, that is up to about £20.
I do not trust hole in the wall machines due to the number of times that I am aware of that they have been bugged by the unscrupulous.
For that reason the local Branch is a must.
Perhaps all the banks should work together, particularly in rural areas, so that one premises acts on behalf of all the banks. If they did this then they would be seen to be serving their customers which I am afraid they frequently are deemed not to be.

My nearest branch closed last June, I now have a 13 mile journey, and a quarter mile walk to do any personal banking. Perhaps I have no right to complain as every day dealing is done on line, but as I am disabled, a journey to my nearest branch of Santander is quite an effort.

Bob lloyd says:
14 February 2015

I bank with natwest and my wife with lloyds both banks staff have tried steering us both to online banking my branch of natwest closes in March and i will now have to drive seven miles to sort anything out rural areas are always the ones to lose out

There are many older people who rely on local banks and cheques who do not use any form of electronics.

I shop from several local small businesses who only take cash or cheque. They say it is too expensive to take credit cards. They are not going to accept an electronic payment and let you walk out of the shop without the assurance that they have been paid.

Builders, electricians, plumbers, etc, always want paying by cash or cheque. They might accept an electronic transfer, but they are not going to sign a “received with thanks” receipt without some sort of proof they have been paid. The majority of them are not going to accept credit or debit cards.

There is still a long way to go before cheques can disappear and too many branches close.

I challenge anyone here to suggest an alternative to cheques and cash for making an on the spot payment by one person to another that can be used anywhere without the use of phones or other electronic devices.

I bank with First Direct so have no local branch or need for one.
I very rarely use cash anymore so only visit an ATM about once a month.
I have to deal with a cheque about once a year and that can be done at an ATM.

For many years I have supported an organisation that organises volunteers to tackle tasks around the country. Some of the younger members use their experience to gain a Duke of Edinburgh Award. I have just completed the renewal slip and written a cheque. The only other alternative was a Postal Order. I would prefer to pay online but it’s no problem to pop a cheque in the post.

As long as cash and cheques exist I don’t think the question is, “do you still need your local branch”, but “how many branches are needed and where”. Then we can ask banks to pull together and have communal branches, and put some back where they disappeared to the dismay of those who used and needed them.

I don’t know how many shared branches exist. I am only familiar with the one we used to have on campus at the university where I worked.

Our banks need to realise that providing an adequate service if vital for the community, which includes elderly and disabled people. If they want to save money, perhaps pay their executives less. 🙂

Perhaps Which? could ask the major banks and building societies about the possibility of shared facilities.

Our local pub / restaurant has closed yet again, after a village purchase to initially save it. Lack of profitable business, like many rural pubs. I do wonder why these premises are not encouraged to take on other roles as well as drinking and catering – village store for essentials and papers, and…… perhaps a site for collective banking and postal services, even if only on restricted days? Does planning prevent it or enterprise?

I cannot see supermarkets wanting to get into providing banking services but it would be handy if we could pay in cheques when doing the weekly shopping. My local Tesco has three ATMs but none has a paying-in facility.

I like my Post office branch for topup s, and I do some mobile banking as well.

Jim McKechnie says:
18 February 2015

I live in Radcliffe on Trent, Nottingham and we have been advised (after long consultations) that our local Natwest is closing. No real explanation from Natwest but, pretty poor to say the least…

It’s probably come about in the wake of their new “Helpful Banking” policy and publicity.

Jim, that leaves you with Santander (if it hasn’t gone). However West Bridgford – 5 miles away – seems to have TSB and a couple of building societies. Radcliffe does seem to have a new main-style post office – does that not offer some banking services?

With a small population it would be difficult to justify more than a couple of financial institutions. I did suggest above that maybe the Post office could act more as a shared banking facility – as some already do I believe.

Unless banking a cheque is urgent, I find posting them to my branch is quick and easy [except it’s a thirty minute walk to the post box and back].

John, why cannot postmen collect your outgoing post from you at the same time as they deliver, I wonder?

I asked our regular postman that very question. He said he couldn’t do it except as a personal favour for housebound people when all he would do would take their letters to the post box. He advised me to request Royal Mail to provide an additional post box in the area. I did that but got nowhere. Apparenty this is a common problem with new housing developments – the traditional infrastructure is omitted. I suppose e-mail has made the post box redundant. I don’t think the banks want much postal business either – the people staffing the local branches have not been educated to write letters competently; all correspondence is dealt with at ‘service centres’ on business parks in remote towns.