The number of banks and building society branches that have closed their doors for good has risen dramatically in recent years, but what help is there for those who rely on them to access money?
According to consumer association Which?, 5,355 branches in the UK have closed since January 2015, at a rate of around 54 each month, with 962 locations shutting their doors in 2022 alone. Some UK towns now lack a single physical branch.
The closure of branches can largely be attributed to the growing popularity of online and mobile banking, which allow you to do most – if not all – of what you would normally do at a branch from home.
But recent data from Age UK suggests 39% of over 65s with a bank account don’t use online banking, and 75% of people in this demographic said they prefer to carry out at least one transaction or banking task at a physical location.
If you rely on a particular local branch, either out of preference or necessity, it can be difficult to change the way you bank.
Why are so many bank branches closing?
People simply aren’t using their local bank branches as much as they used to, and with banks seeking ways to trim their costs, closing some of these down is an obvious starting point.
Around 72% of adults in the UK now use online banking, according to research by UK Finance. Banking online and by phone lets people manage their accounts, view statements, set up standing orders and direct debits, and even cash cheques. Many customers don’t feel the need to visit their local bank branch when they can do all this from home.
As you might expect, online banking soared in popularity during the pandemic, when restrictions were in place and many services were moved online. However, even in the decade preceding the pandemic, bank branches were seeing footfall gradually decline.
All of this means that some banks simply don’t see the point of keeping as many branches open anymore.
Some branches have also closed in recent years as a result of business mergers, when one bank or building society buys another. For example, Yorkshire Building Society merged with several smaller building societies between 2008 and 2011, and Clydesdale Bank and Yorkshire Bank were merged with Virgin Money in 2018. These mergers resulted in multiple branches of the same businesses in the same towns, which led to some of the extra branches being closed.
The Financial Conduct Authority (FCA) requires banks to carry out research before closing down local branches. Banks need to prove that they have recorded and analysed usage trends and the needs of their customers, particularly those who are more vulnerable, which will include speaking to local councils and charities to make sure they have the full picture. If the FCA feels like a bank hasn’t done enough research, or that the replacement banking services it plans to offer after a branch shuts down are inadequate, then they will be able to halt the closure of that branch.
What can I do if my local bank branch closes?
It goes without saying that these closures aren’t welcome news for many people. Plenty of customers and small businesses rely on having a local bank branch, either because they are unable to make the switch online or simply would prefer not to. The shift online is particularly challenging for some rural communities, where broadband and mobile services tend to be less reliable. If you want to check whether your local bank branch is due to close, Which? Has a useful Bank branch closure checker so you can see if any branches are closing in your area.
According to figures from the FCA, 27% of people with a bank account regularly use a branch, and branch customers are more likely to include those with less confidence in or access to digital services (52%), those aged 75 or over (45%), those in poor health (37%) and the self-employed (37%).
Fortunately, the Access to Banking Standard, introduced in 2015, means that banks are required to inform customers about planned closures and provide them with suitable alternatives so they can keep banking.
If you still use your local branch to bank and have found out that it’s shutting down – or you’re worried about what you would do if it did – then here’s a few ways you can continue to bank in these circumstances.
Banking at the Post Office
UK finance estimates that 99% of customers can carry out their basic banking needs at the local Post Office. These include withdrawing cash, checking your balance and paying in cash and cheques.
Post Offices do not enable you to transfer money or seek advice from your bank, however. Banking with your Post Office might only be a suitable option if you have another branch nearby.
Mobile banking vans, or banks on wheels (Natwest, Lloyds, Bank of Scotland)
Not to be confused with the kind of mobile banking that you can do on your phone, mobile banking vans (also called banks on wheels to avoid confusion) travel around the country, visiting specific locations and allowing customers to do their banking there.
The exact services available to you when banking on wheels varies slightly between different banks, but they normally allow you to make withdrawals, deposits, enquiries, transfers and bill payments, as well as order foreign currency, manage credit cards and ISAs, and request statements.
Banks on wheels are currently offered by Natwest, Lloyds and the Bank of Scotland. You can find out if your bank operates a bank on wheels in your area on their website.
Should I switch to online banking?
Alternatively, you may want to consider making the switch to online banking or mobile banking. Though this can be an intimidating prospect, it’s a convenient and reliable way of handling your money, and is easy to get to grips with even if you’re not tech-savvy.
Most major banks will allow you to bank with them by setting up an online account. This is usually fairly straightforward, though it may take a bit of time. Once done, you will be able to manage your accounts, make payments, set up standing orders and Direct Debits, and view your statements from your computer.
Many banks will also have a mobile app, which you can use to perform many of the same services and apply an extra layer of security to your online banking. Some banks now allow you to cash cheques using your phone camera as well.
The main downside to these forms of banking is that customer support is not as reliable as at a physical location, although your bank should have a helpline or online messaging service that you can use to ask for help.
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