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More free cash machines in low-income areas

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Issued 17 July 2008

Over one million people are benefiting from 419 new non-charging cash machines installed in low-income areas throughout the UK in the last 18 months, Economic Secretary to the Treasury, Kitty Ussher MP and Treasury Select Committee Chairman, John McFall MP announced today.

This substantial progress is the result of a joint initiative between HM Treasury and the ATM working group, chaired by John McFall.

Kitty Ussher and John McFall announced that:

  • 419 new free access cash machines are now operating in low income areas;
  • A further 143 locations for free access cash machines have been identified and are planned for end- 2008;
  • These 562 free cash machines will benefit around 1.3m residents who as a result will not have to pay charges or to travel outside their community to withdraw cash; and
  • Work continues to ensure there is a free access cash machine in every identified target area.

Kitty Ussher said:

"This initiative means that over one million people in low income areas no longer have to pay to get hold of their money. This is real progress in our campaign for access to free cash machines in neighbourhoods up and down the country and a step forward for financial inclusion.

When people have to pay to get their hands on their own money it excludes them from the financial system and these real costs are often borne by those who can least afford it. These new cash machines will help individuals on low incomes to access financial services as easily and cheaply as possible.

I am also pleased that the ATM industry had made real steps to improve its signs on cash machines so that it is absolutely clear at a glance whether the machine is free or charging.

When this initiative is completed and all of the free-to-use machines are in place, around two million low-income Britons will benefit - a fantastic result and I would like to thank all the parties involved for their efforts in make sure this happened."

John McFall said:

"In today's society, financial exclusion can lead to social exclusion, as it makes worse the problems that people in low-income areas face. It is vital that every family can access the basic financial services, such as bank accounts and cash machines, which many of us take for granted. This free-to-access ATMs initiative has allowed 1.3 million people in low-income areas to benefit - an outstanding achievement.

A number of the new cash machines have proven so popular that they now no longer require funding from the scheme -- proof that these machines were much needed, and are making a real difference to the communities in which they are located.

The efforts put in by all those involved in the initiative -- in particular, LINK and the cash machine operators -- have been commendable. The Treasury Select Committee has worked hard to keep financial inclusion on the agenda for many years now, and I am delighted that, with the help of the Government and the financial services industry, this hard work is paying off."

LINK, the operator of the UK cash machine network, has been coordinating efforts to place the cash machines in low-income areas, and enforcing the rules on cash machine charging and signage.

Kitty Ussher and John McFall also praised the work of LINK to update screen information and make changes to external signage at the majority of pay-to-use cash machines. This ensures that charging machines meet good practice standards for "at a glance" signage, enabling customers to quickly and easily distinguish between charging and non-charging machines.

Notes

1. Following concerns raised by the Treasury Select Committee in March 2005 about the impact of ATM charges on lower-income groups and the transparency of charges at ATMs, the Parliamentary Working Group on ATMs was established at the instigation of HM Treasury under the chairmanship of John McFall.

The Group“s report, “Cash machines - meeting consumer needs

2. All major cash machine operators in the UK - including banks, building societies and independent cash machine operators are part of the LINK ATM network. About 37,500 free ATMs currently account for 96% of cash withdrawals, with the remaining 4% of withdrawals made at some 27,000 charging machines across the UK. Banks and building societies currently pay an 'interchange fee' when machines operated by other companies are used to access their accounts. As part of this initiative to locate free ATMs in low income areas a financial inclusion premium, a 30-50% premium per transaction, is paid to cash machine operators establishing ATMs at sites with lower customer-use.

3. The then Economic Secretary, Ed Balls and John McFall wrote to Members of Parliament and local authorities in December 2006 with a further update in March 2007 asking where to places free ATMs, with a significant number of suggestions received.

4. Four hundred and nineteen non-charging bank machines are now in operation, and LINK is continuing to work to realise identified potential ATM sites, especially those within outstanding target areas. Full details on progress made to date, can be found on the LINK website; including a breakdown for every constituency: www.link.co.uk

5. As part of the Government's commitment to ensuring that everyone has access to financial services, 'The Action Plan for Financial Inclusion for 2008-11', launched by Economic Secretary Kitty Ussher in December 2007, announced Government funding of £135 million for initiatives to promote financial inclusion, including increasing the availability and awareness of home contents insurance for low-income people and free face-to-face money advice.

6. As an incentive for operators to set up and maintain cash machines free-of-charge, a 'financial inclusion premium' compensates cash machine operators for the expected lower cash machine-use in these areas. This is funded by the cardholders' banks and building societies. Nine of the new cash machines proved popular enough that they now no longer require funding from the scheme.

 

Region

Live receiving premium

Live but ineligible for premium

Live, eligible but no claim

Total live ATMs

Under Contract ATMs

Total ATMs

East midlands

25

8

3

36

6

42

Easter

4

6

-

10

3

13

London

7

9

-

16

3

19

North East

37

13

5

55

15

70

North West

40

18

3

61

21

82

Northern Ireland

-

-

5

5

3

8

Scotland

60

4

-

64

21

85

South East

9

5

-

14

8

22

South West

6

6

1

13

6

19

Wales

34

10

3

47

27

74

West Midlands

19

18

2

39

11

50

Yorkshire & the Humber

42

11

6

59

19

78

Total

283

108

28

419

143

562


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© Crown Copyright. Material taken from HM-Treasury. Reproduced under the terms and conditions of the Click-Use Licence.



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Article Published/Sorted/Amended on Scopulus 2008-07-24 07:51:07 in Economic Articles

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