Bank branch closures

Wera Hobhouse, Liberal Democrat MP for Bath, has joined other MPs in writing to the Chief Executive of the Financial Conduct Authority (FCA) to raise concerns about recent banking closures across the country – including Bath.

At least six of the city’s major bank branches have closed since 2020, from the Lloyds and NatWest branches in Oldfield Park to the Santander branch at Bath University. There are currently 9 branches left in the city, which represents a loss of 60.9% since 2015.

Across the country, banks and building societies have closed 5,908 branches in less than a decade, at a rate of around 54 each month.

The rapid decline in physical bank branches over recent years comes as a result of the popularity of online banking. However, Mrs Hobhouse worries that the scarcity of branches in Bath will isolate people from being able to access cash in the city. This is particularly concerning following a report by Age UK revealing that around 40% of older people do not not manage their money online, putting them at a high risk of financial exclusion. 

Currently, a “last bank in town rule” operates in most areas which prevents LINK, who carry out assessments of cash access, from considering whether an area requires a new cash solution to protect access to cash, if there is still a remaining bank or building society branch in a town. 

The Bath MP signed an open letter, which garnered cross-party support from over 55 MPs, to the FCA in their capacity to protect access to cash following the introduction of the Financial Services and Markets Act (2023). The letter calls for the FCA to grant LINK the ability to operate on a case-by-case basis to assess whether a town requires more avenues for people to access cash, rather than waiting for the last bank in a town to shut its doors for good. 

Mrs Hobhouse urges early intervention in areas that appear to be rapidly losing physical branches in order to prevent communities from losing access to cash altogether. In his response, the Chief Executive of the FCA agreed that more needs to be done to speed up the delivery of access to cash measures for both businesses and individuals and to support communities with branch closures. However, the FCA’s proposals fail to consider an early intervention approach where LINK can assess cash access in a town before the second to last bank closes. 

Mrs Hobhouse commented: 

“Everyone should be able to access cash. It is fundamental to a functioning community. Yet, following the pandemic, which marked a shift towards online banking, many of my constituents have found it increasingly difficult to access cash. 

“One by one, banks are closing their doors in Bath, leaving vulnerable members of the community isolated from being able to access their hard-earned cash. 

“We cannot just sit on our hands and allow banks to disappear from our high streets. But the FCA’s current proposals come up short. LINK must be able to intervene early and assess areas individually to determine what a community needs.”