The UK has lost two-thirds of its bank branch network in 30 years, warns Which?

The UK has lost almost two thirds of its bank branches in the last 30 years, leaving a fifth of households now more than three kilometres from their nearest branch, new Which? figures reveal.

According to parliamentary records, there were 20,583 branches in 1988, but the consumer champion’s analysis of all the current account providers shows that there are just 7,586 today.

While wholesale bank closures have left one in five (19%) of the population more than three kilometres from their nearest branch as the crow flies, almost one in 10 people (8%) have to travel more than five kilometres and six per cent are more than six kilometres from a bank.

New Which? research also calls into question the viability of Post Office branches as a solution to plug the gap in banking services – with almost half of adults unaware that they are available as an alternative.

Sparsely-populated parts of Scotland have been hit hardest by closures, accounting for the top 70 communities farthest from a bank.

However, Which?’s data shows that the South West and East of England have been disproportionately affected, taking into account the number of people living in each region.

For many smaller towns and people in rural locations, the loss of a local bank has been compounded by cashpoints closing following changes to how the LINK network is funded – with previous Which? research revealing the poorest households and older generations are set to be worst hit as access to cash is cut.

The Post Office – with its sprawling network of 11,547 branches – is often proposed as a solution when bank branches close.

And a Which? survey found good satisfaction ratings from those who had used a Post Office – with over three quarters (77%) saying they would be likely to use the service again.

However, almost half of adults (45%) in Great Britain were unaware that they could use a Post Office for banking purposes and almost half (47%) said they were unlikely to use one in the future.

Consumers unlikely to use the Post Office for banking cited a number of reasons such as concerns over staff expertise in financial services (28%), long queues (42%) and a lack of privacy to engage in financial affairs (32%). Six in ten (59%) simply prefer to deal directly with their bank.

There are also a number of services valued by consumers that are not currently offered by the Post Office. These include opening or closing accounts, transferring money between accounts, making a complaint about the bank and requesting a replacement debit card.

Banks also usually demand that customers call into a local branch for anti-fraud checks, or make an appointment to discuss important legal documents, such as lasting power of attorney or grant of probate. None of these tasks can be completed at a Post Office.

Among respondents to Which?’s survey, almost a third have transferred money from their account (29%), sought advice or made enquiries about savings (12%) and current accounts (9%) in the last year. Meanwhile, almost nine in 10 (86%) adults visited a bank branch at least once in the past year.

Which? wants banks to ensure that they cater to the needs of all their consumers. With many communities potentially struggling through the double blow of bank and cashpoint closures, Which? believes action is needed to ensure people aren’t financially excluded and denied access to cash, which millions still rely on.

Ceri Stanaway, Which? Money Editor, said:
“The true scale of bank branch closures in recent decades is staggering – and has left millions of people struggling to access the vital financial services and cash that they need.

“For many there is simply no substitute for a dedicated branch and the wide range of services it offers and many customers now face having to travel long distances if they are to avoid financial exclusion.

“We want to see banks properly justifying the reasons for closure and taking into account their customers’ needs before shutting their doors – and their customers out.”

Notes to editors

Case study: Ann Smith, Purley, Surrey, said:
“The closure of my bank last year has had a major impact on my banking. The reason given was a reduction in customer footfall, but I had never gone into the branch when there was no queue. I think the real reason was the high business rates imposed by Croydon council. ‘While Post Offices meet the need for access to cash – a need that online banking doesn’t meet – other transactions can’t be undertaken there. Telephone banking has proved to be of only limited use. It’s nonsense to claim that people don’t need branches any more. ‘Despite its sentimental radio and TV ads, I feel my bank doesn’t really care about its customers. Many of us feel that our loyalty has been for too long taken for granted and are taking our hard-earned savings elsewhere.”

Martin Kearsley, Banking Services Director at the Post Office, said:
“With the Post Office’s trusted network of 11,500 branches, and with 99.7% of the UK population within 3 miles of their Post Office nearest branch, we are uniquely placed to bring vital services to local communities right across the country. It’s a responsibility that we take very seriously, and it’s why we have secured continued access to almost every UK bank account through all of our branches, in partnership with the banking industry. So whether there is a bank branch nearby or not, we offer a range of every day banking services in every single one of our Post Office branches. From cash deposits and withdrawals, to balance enquiries, we want to make life as easy as possible for the millions of customers and small businesses who use us every day nationwide, and we will keep reminding people that we are here for them – not just today, but tomorrow and into the future too.”

Areas where recent bank branch closures have led to towns or villages without a single bank branch include:
Lymm, Cheshire
Muir of Ord, Marybank and Strathconon, Scottish Highlands
Byrness, Otterburn and surrounding NE19 villages
Broseley, Shropshire
Fishguard, Pembrokeshire
Sturminster Newton, Dorset

Which? looked at parliamentary records from the House of Commons Library ‘Bank branch closures’ (no. 385, 19 October 2018) to establish there were 20,583 bank or building societies in 1988. While Which?’s research into information provided by banks about the current branch network suggests there are now just 7,586 branches today. We would stress that this cannot be a complete like-for-like comparison, however it gives a good indication of the size of the network thirty years ago against its current levels.

YouGov surveyed 2,049 British adults between the 17th – 18th September 2018 for a nationally representative survey on behalf of Which?.

We analysed branch data from the following UK current account providers, excluding banking services within supermarkets and building societies that don’t offer current accounts: Bank of Ireland, Bank of Scotland, Barclays, the Co-operative Bank, Clydesdale and Yorkshire Banks, Cumberland BS, Danske Bank, First Trust, Halifax, HSBC, Lloyds, Metro Bank, Nationwide BS, NatWest, Royal Bank of Scotland, Santander, TSB, and Ulster Bank. Our data combines bank branch data with small output areas (Office for National Statistics) population statistics, which relates to small areas containing 50-100 houses. We measured the population-weighted centre of these areas to the nearest branch, as the crow flies, providing the best estimate of how far each household in the UK is from its nearest bank. The branch data was obtained directly from banks and from publicly available records they have maintained.

Press Release