Half a million people across Scotland who are dependent on cash are at risk of being forgotten by banks due to the rate of bank closures, the Scottish Affairs Committee has warned.

Since 2015, 53% of Scotland’s bank branches have closed, which represents the highest percentage loss across the UK’s four nations.

From difficulties adapting to a society built on digital payments, to older people on lower and fixed incomes using it as a budgeting tool, many people still opt to use cash for a number of reasons.

However, the Committee has today expressed concern that not enough support is being offered to support these individuals as the UK transitions to an increasingly digital society. The Committee has also stated that not enough adequate research been undertaken to understand the full implications of such a move.

“Access to cash across Scotland has been decimated in recent years, leading to Westminster Committees investigating the issue multiple times,” said Scottish Affairs Committee Chair, Pete Wishart. “While the move to digital banking and payments has offered a method at which to do transactions that many of us enjoy, we cannot forget the 500,000 people in Scotland who rely on cash in their day-to-day lives.

“With the cost of living crisis deepening, many people are using cash for budgeting. But what is deeply worrying is that bank branches are closing at a record rate with very limited research or thought conducted of the possible widespread implications.”

The Committee has welcomes the government’s introduction of its Financial Services and Markets Bill, which includes added protections on access to cash. When appearing before the Committee before his resignation from the role of Treasury Minister last week, the former minister John Glen recognised the need for a more detailed picture of cash usage in Scotland.

As well as government legislation hoping to support access to cash, there have also been a number of voluntary agreements championed within the sector. This includes LINK’s Financial Inclusion Programme, which provides free access to cash via free ATMs in the most rural and deprived areas of the UK.

“Since the predecessor Committee’s inquiry considering this very issue, it is welcome that the government is legislating to protect access to cash,” Wishart added. “However, this positive announcement is beset by the risk that banks may close their doors before legislation on this matter comes into force.

“We are aware of the commercial considerations affecting banks, which has played a role in the recent increase of branch closures. We welcome the effort taken by the banking industry to protect access to cash, although we still feel that there is a clear need for legislation.

“In our report today, we are calling for more research into the implications of a cashless society and more secure and longer-term agreements to ensure the continued access to cash. The government appears to be in listening mode on this issue, and I look forward to its response in due course.”

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