Almost a third of over-65s in Britain are ‘uncomfortable’ with online banking, putting them at risk of financial exclusion as banks continue to close branches in the main streets, according to a campaign group for the elderly.
The findings from the charity Age UK, published on Wednesday, reflect the physical cash addiction of a key demographic of more than 11 million people, or almost a fifth of the population.
Cash remains the second most common form of payment after debit cards, but the corona virus pandemic has accelerated the shift to increasing use of cashless payment methods.
At the same time, banks continue to reduce their expensive branch networks. There are fewer than 6,000 branches in the UK, less than half the number two decades ago, with 662 branches closing last year. So far this year, another 238 are expected to close, according to data from ATM operator LINK.
“The ability to manage your own financial affairs is something many older people cherish,” said Caroline Abrahams, Charity Director at Age UK. “It’s extremely upsetting if you find that your ability to do so is taken away because your local bank branch is closing and you can’t easily get to another.”
The research, based on a survey of 1,147 UK respondents, found that older people were less likely to be comfortable with online banking, but nearly a quarter of the oldest age group young (65-69) had reservations.
Ministers have promised to protect access to cash through the Financial Services and Markets Bill which is pending in Parliament by giving the Financial Conduct Authority higher powers.
But the new legislation does not specify how the regulator could act. The government only set out its expectation that people should not travel more than a ‘reasonable distance’ to withdraw or deposit money. Instead, the FCA should undertake a review of geographic targets at a later date before advising the government on next steps.
“Our Financial Services Bill will give regulators the power to set standards that ensure people have reasonable access to their hard-earned money,” the government said.
An industry-backed initiative is making slow progress. It has pledged to develop a network of 52 “banking hubs”, run in conjunction with the Post Office, to target communities that have lost their last main street branch. The deployment was agreed at the end of 2021 but so far only four hubs are operational, of which two that were used in the pilot.
“Delivery to date has been slow and with banks continuing to announce closures, this will leave more communities becoming banking deserts,” Age UK warned in its report.
Gareth Oakley, managing director of Cash Access UK, which oversees the banking hubs program, promised the rollout would accelerate. “It takes time to set up a new shared hub in a community, but as we move forward, there is unlikely to be a gap between closing a branch and opening a hub banking.”
Derek French, a former bank executive who led a campaign to promote community banking, said he was disappointed that new legislation had failed to compel people to access banking services in person, allowing banks to provide more limited banking services instead. automated treasury services.
“Legislators are playing into the hands of offending banks who will lose the momentum they have reluctantly given to the creation of comprehensive banking hubs in favor of a ‘solution’ that is cheaper – for them – and far less effective for their customers,” he said.
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