Why Cash Matters for an Inclusive Scotland
Jul 12, 2024
The withdrawal of bank branches and ATMs across the UK is limiting citizens’ choice and autonomy. A recent BBC article explores the personal stories of Scots with a preference for cash who are now at risk of financial exclusion.
Caroline Cawley of Muirhouse, Edinburgh, finds cash convenient—especially for paying at small, local businesses—and a valuable aid to budgeting. She has been unable to work or travel far for the past eight years due to chronic pain from fibromyalgia, and fears that, should the local Post Office service close, she will either have to pay a fee of £1.99 (~$2.50) at her area’s only ATM, or make the difficult bus journey to a supermarket to withdraw money.
It’s much easier to control your spending when it’s physically in your hand. If you are low-income and you just want to pop into the shop for a pint of milk, a lot of places want you to have cash.
Writing for the BBC, Hope Webb and Emma Clifford Bell say: ‘Caroline is one of a growing number of people affected by financial exclusion—a situation where people do not have access to mainstream services such as bank accounts, affordable credit, insurance and savings.’ They emphasise that this can affect anyone, but those living in poverty and/or with disabilities are especially at risk.
I have become very dependent upon delivery services, but they charge you as well… It just racks up and you end up with something that would cost you £5 in the shop, costing you £10 by the time you put all the charges on it. It just makes everything more expensive and everything more difficult.
The local post office service is provided by Costless Express, run by Urfan Hussein and his family. They have been in business for 30 years, but say rising transaction fees associated with cashless payments are damaging profits, obliging them to pass extra expenses on to their customers.
Every month we pay about £700 on average for the card transactions. So that's basically £700 out of your profits whereas cash, when people used to use cash every day it was great. "Now we're about 70% card and about 30% cash. So it's a huge chunk for family businesses to pay, a lot of customers don't realise.
He encourages customers to use the post office, since they can withdraw cash and access banking services free of charge. Should the business continue to struggle, however, it may not be possible to continue offering the facility.
Financial Inclusion for Scotland—a group of policymakers and professionals from private, charity and nonprofit sectors working to address financial exclusion—is calling on the Scottish government to allocate ‘dormant assets’ to measures improving banking access.
We have a big problem with poverty in this country—over one million Scots are thought to be living in poverty. One of the really hard things about people with less income is that they pay more for things, that's called the poverty premium.
The government has conducted a review, but warns that while there should be an increase of funding for work to address financial inclusion, the precise amount and extent have yet to be agreed.
Following review and consultation by the UK government, the Dormant Assets Act 2022 will enable the scheme to be expanded... While it is expected this will lead to an increase in the funding Scotland receives from the scheme, the extent and timing of this are still unknown.
The Post Office network recently reported cash deposits and withdrawals have hit new highs as, for the time being, people such as Caroline continue to depend on it for access to cash and, through it, the wider economy.