Major change to free cash withdrawal rules as banks shut thousands of branches

A MAJOR change to cash withdrawal rules is set to hit high street banks and building societies.

It comes as several big name banks have closed thousands of branches across the country since 2008.

The closures have caused concerns for many Brits, particularly the elderly, who rely on in-person banking services such as cash withdrawals.

Among the high street banks which have already closed hundreds of locations this year alone are Barclays, HSBC, NatWest and Lloyds.

But new rules set by the Treasury could bring some hope.

Banks could soon be fined if they don't provide free access to cash withdrawals within three miles of consumers and businesses, the Government has announced.

Treasury minister Andrew Griffith said: "Whilst the growing choice and convenience of digital payments is great, cash has an important and continuing role to play.

"That’s why we are taking action to protect access to cash in law.

"This means fee-free withdrawals and the availability of cash facilities within a reasonable distance.

"People shouldn’t have to trek for hours to withdraw a tenner to put in someone’s birthday card – nor should businesses have to travel large distances to deposit cash takings.

"These are measures which benefit everyone who uses cash but particularly those living in rural areas, the elderly and those with disabilities."

It means that current-account customers would no longer be hit with hidden fees at ATMs when they try to take money out.

Ministers are said to be primed to publish guidelines on the changes within days.

The new rules would mean that the Financial Conduct Authority (FCA) will have new powers to fine banks don't provide free access to cash.

As yet, it's not known how the three-mile rule could be applied to more rural areas where businesses and shoppers are more spread out.

The new measures, if they are enforced, could lead to better access for customers who need to withdraw cash when their local branch closes.

The Sun has contacted the Treasury for comment.

If you're struggling to access in-person services there are still a several ways customers can access basic banking services without having to head over to the next town.

Banking hubs, which offer traditional shared services, have been set up in several locations around the UK to help plug the gap — including Brixham, Cambuslang, Cottingham and Rochford.

If the latest raft of closures will leave you with no bank in your area, you should be able to do most basic tasks at your local Post Office. 

You can use one of the Post Office’s nearly 12,000 branches to perform basic banking tasks — but not open new bank accounts or take personal loans and mortgages.

Many banks also offer a mobile banking service, which is where your bank brings a bus to your local area that has the services that are usually available at your branch.

You should call up your bank to see if it runs such a service and they will be able to tell you where and when it will be parked.

Other banks use buildings such as village halls or libraries to offer mobile banking services.

Meanwhile, 85 branches are yet to close this summer, with several closing just this week.

Most recently,  Barclays revealed it will be pulling the shutters down on another 14 locations this year.

Plus, banks are set to make major changes to account closure rules – and it’s good news for thousands of households

Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.

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