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Millions of people across the UK will benefit from new legislation to protect access to cash, helping level up opportunity and ensure financial inclusion across the UK, the government announced.
For the first time, the UK’s largest banks and building societies will be subject to new Financial Conduct Authority powers to ensure the continued availability of withdrawal and deposit facilities in local communities across the UK.
Measures will be legislated for in the upcoming Financial Services and Markets Bill that will protect consumers and enhance the UK’s position as a global leader in financial services.
Under the new rules, the financial regulator – the Financial Conduct Authority (FCA) – will be granted new powers over the UK’s largest banks and building societies, to ensure that cash withdrawal and deposit facilities are available in communities across the country.
The FCA’s new powers will allow it to address cash access issues at both a national and local level. To support the FCA, the government will in due course set out its expectations for a reasonable distance for people to travel when depositing and withdrawing cash. This will reflect the existing spread of cash withdrawal and deposit facilities in the UK.
Cash is the second most frequently used method of payment in the UK, and around 5.4 million adults rely on cash to a very great or great extent in their daily lives – further emphasising the importance of this legislation and new FCA powers.
The Chancellor set out in his Mansion House speech in 2021 that the UK must remain at the forefront of innovation and technology, and the government recognises the need to embrace the transition to a more digital world and realise the opportunities this brings individuals and businesses.
The government passed legislation to enable the widespread adoption of cashback without a purchase as part of the Financial Services Act 2021, which was possible as a result of the UK’s departure from the European Union.
And last month the government announced its intention to legislate to provide the Bank of England with the powers necessary to ensure the UK’s wholesale cash infrastructure – which includes the network of cash centres integral to the sorting, storing and distribution of notes and coin – remains effective, resilient, and sustainable, and continues to support access to cash across the UK. Taken together, these measures will ensure that the UK’s cash infrastructure is viable for the long term.
These powers will be legislated for in the upcoming Financial Services and Markets Bill, which will protect consumers and enhance the UK’s position as a global leader in financial services.