Plans to safeguard the future of cash – from copper coins to larger banknotes – have been set out by the Government.
A new group chaired by the Treasury will set a strategy and co-ordinate work to support nationwide cash access to help safeguard physical money for those who need it, under plans being outlined by Chancellor Philip Hammond.
The announcement was being made during the Verdict of the Pyx ceremony in London, part of a longstanding coin-checking custom dating back to the 12th century.
Mr Hammond also reiterated that there will be no changes to the mix of coins and notes, with all denominations – from the penny to the £50 note – staying in circulation.
There had previously been speculation that the Treasury may be paving the way for the end of 1p and 2p coins after inviting comments on the mix of coins in circulation.
There have also been strong concerns raised over the past year at the rate at which communities are losing easy access to cash amid bank branch and ATM closures.
Research from Which? found this week that fees of at least 95p per withdrawal were imposed on nearly 1,700 ATMs between January and March.
Some 2.2 million people are estimated to be almost entirely reliant on cash in their daily lives, with the elderly, vulnerable and those in rural communities likely to be hardest hit by a decline.
The Treasury said the plans will complement work to support digital payment methods which continue to revolutionise and expand the ways people manage their money.
Mr Hammond said: “Technology has transformed banking for millions of people, making it easier and quicker to carry out financial transactions and pay for services.
“But it’s also clear that many people still rely on cash and I want the public to have choice over how they spend their money.
“I’m also setting up a group which brings together the Treasury, Bank of England and the regulators to safeguard the future of cash and ensure its availability for years to come.”
Natalie Ceeney, chairwoman of the Access to Cash review, which recently described the cash system as “on the verge of collapse”, said: “Cash use is falling rapidly, but digital payments don’t yet work for everyone.
“We need to safeguard the use of cash for those who need it, and at the same time work hard to ensure that everyone can participate in the digital economy.
“If we sleepwalk into a cashless society, millions of people will be left behind.
“I’m delighted to see the Government taking a leadership role on this critical issue, and look forward to seeing action as a result.”
As well as establishing the Joint Authorities Cash Strategy Group (JACS) – chaired by the Treasury and bringing together regulators – the Government said it will also:
– Support the Bank of England’s work to develop a new wholesale cash distribution system to ensure cash is being distributed as needed across the country
– Develop a coin checking and validation framework to remove counterfeits from circulation and stop them from ending up in people’s pockets
– Continue to support new digital methods of payment while safeguarding access to cash for those who need it
The Government said more than £2 billion has been invested since 2010 in the Post Office network to support customers in accessing banking services.
Currently, 99% of personal customers and 95% of small business customers can carry out their everyday banking locally at one of the Post Office’s 11,500 branches.
ATM network Link has committed to replace closed machines in rural or remote areas when there is no free ATM within a kilometre or Post Office branch available.
Link has also recently implemented new “super premiums” to further safeguard free-to-use ATMs in remote and deprived areas.
David Chaplin, head of campaigns at Which?, said: “Millions of people across the UK who rely on cash in their daily lives are currently at risk of being stripped of their ability to pay for essential goods and services – so the Government’s unprecedented commitment to protecting cash should finally offer them some reassurance.
“This new body must act urgently to address rapid changes to the cash landscape, as its success will be judged by how it ensures people can continue to access their preferred payment method in the face of bank branch and cashpoint closures, intermittent broadband access and regular IT glitches affecting digital payment methods.”
Federation of Small Businesses (FSB) national chairman Mike Cherry said: “The Chancellor has shown he is listening to the small business community today.
“We called for the appointment of an expert group dedicated to protecting free access to cash and that’s exactly what is now being delivered.
“Millions of small business owners have customers that still want to pay in cash.”
He continued: “Keeping 1p and 2p coins in circulation is the right call. The freedom to use pennies is still important to a lot of small firms.
“For many, being able to charge prices that end in 99p rather than a round pound figure can be enough to tip intrigue into a sale, particularly where lower-value items are concerned.”