personal finance

UK loses two-thirds of bank branches in 30 years


The UK has lost two-thirds of its bank branches in the past 30 years, sparking warnings that communities were losing access to mainstream financial services.

New research by Which?, the consumer group, found there were 7,586 bank branches today, compared with 20,583 in 1988. The decline has left one in five people more than three kilometres away from their nearest branch and almost one in 10 more than five kilometres away from one, it said.

Sparsely populated areas of Scotland have been hit hardest by closures. But the south-west and east of England have also been disproportionately affected by the decline, Which? said.

Banks have been closing branches because people are increasingly banking online, resulting in fewer branch visits. Previous research by UK Finance, the banking industry’s trade association, found banks received a daily average of 104 visits in 2017, down from 140 in 2012 — a 26 per cent fall.

“We can’t stop tech disrupting traditional models of banking,” said Gareth Shaw, Which? money expert. “But this is happening at such a pace, we are concerned some people are being disenfranchised and excluded from accessing finance.”

UK Finance said this week: “Bank branches play an important role in the life of local communities and decisions to close them are never taken lightly.”

To support people affected by closures, several banks have signed up to an arrangement with the Post Office that allows customers to bank at 11,500 post offices.

But the latest research questioned how effective post offices were at plugging the banking services gap. It found almost half of 2,000 adults surveyed were unaware that the Post Office offered banking services.

Of those who had used a post office for banking, nearly half said they were unlikely to use one in future. Several reasons were given, with 28 per cent of people concerned about the expertise of Post Office staff, 42 per cent annoyed by long queues and 32 per cent worried about a lack of privacy. Six in 10 people preferred to deal directly with their bank.

The researchers pointed out that not all bank functions can be carried out at Post Office branches. For example, while customers can pay in and withdraw cash, and use cheques at a post office, they are not able to open or close bank accounts, transfer money between accounts or request a replacement debit card.

Martin Kearsley, banking director at the Post Office, said the company was working to raise public awareness of the availability of banking services.

He added: “All staff handling Post Office transactions are fully trained and vetted so they can handle banking business efficiently and discreetly.”



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