The decline of ATMs?

Cash is not just for Christmas, but December is traditionally the time when we queue up at our local cash machines in record numbers. £766m was withdrawn on 22 December 2017 in 8.7 million transactions, making it the busiest day of 2017. Cash machines, or ATMs, are now over 50 years old and are as common and central to the high street as red telephone boxes once were. They are a tremendous personal convenience and beneficial to local shops and communities.

But cash is less pervasive than it was. A new generation of consumers are quite comfortable with only infrequent reliance on it. After 30 years of inexorable rise in the number of ATMs and transactions, the last few years has seen a plateau in use and a decline on some measures. Meanwhile the rise of internet shopping has prompted changes in consumer behaviour, and the UK is a leader in this trend. In light of this, the banking and ATM industry are looking a fresh at the wholesale provision of facilities. 

But, as with changes to the bank branch network, there is understandable concern from government, community groups and individuals about a reduction in networks and,specifically, a reduction in provision of free ATMs. That the industry accepts that cash has a social cohesion role too is implicitly reflected in its successful financial inclusion programme. This programme recognises that left to market forces, there would be fewer, and fewer free to use, ATMs in poorer areas – thus adding to the ‘poverty premium’ found in other aspects of life. 

How successful has the industry been in maintaining provision of free cash across the country, including areas with high deprivation? This article looks at data on ATMs managed by LINK, which represents effectively the whole UK network.

ATM provision

LINK has published constituency-level data in 2017 and 2018 which helps us understand how provision of free ATMs varies across the UK. Do some regions have better provision of free ATMs? Is provision worse in small towns and villages? Do deprived areas have better or worse provision of free ATMs?

Overall, the number of free ATMs declined from 54,194 to 53,389 between 2017 and 2018. Meanwhile the number of fee-charging ATMs fell at a greater rate, from 13,875 to 12,548.

Regions and nations

Not all parts of the UK have equal provision of free ATMs. The percentage of LINK ATMs that are free to use varies from a high of 98% in Lagan Valley constituency in Northern Ireland to a low of 55% in Great Yarmouth, North Warwickshire and Ogmore (South Wales). Looking at regions, Northern Ireland has the highest percentage of free LINK ATMs (90%). Scotland is second-highest at 86%. In four regions, however, the percentage of free ATMs is below 80%,with the West Midlands having the lowest rate at 76%.

The maps above show constituency data on the provision of free ATMs and the percentage of ATMs that don’t charge fees.

The percentage of free ATMs isn’t the only measure of provision.We can also compare the number of ATMs to the number of people living in each area.On this measure, the top of the regional rankings doesn’t change – Northern Ireland and Scotland still have the best access to free ATMs, with Northern Ireland having 100 free ATMs per 100,000 population. The South East, South West and East of England regions have the lowest provision of free ATMs, at 72 per 100,000 population. At constituency level, Cities of London and Westminster has the highest ratio of free ATMs to population – unsurprisingly given that it is a major business centre – while Sheffield Hallam has the lowest.

Since 2017, Scotland has seen the largest fall in free ATMs (2.2 per 100,000 population, or around 2% of free ATMs) – although it still has the second-highest provision. At the other end of the scale, London saw almost no change in free ATM provision.

While the number of free ATMs relative to the population size is an indicator of ATM provision, it is an imperfect one. It doesn’t tell us anything about the distribution of ATMs: e.g. if a constituency has many ATMs but they are all on the same street, then most of the constituency has poor access to ATMs. Because the data we’re looking at only has a single figure for each constituency, it can’t detect this kind of issue. Data on the point locations of ATMs has not been published but LINK does maintain an online map to browse locations.

Cities and Towns

As well as differences between regions, there are also differences between types of settlement. Using our city and town classification of constituencies for Great Britain, we can estimate how free ATM provision differs between small towns, villages,and core cities. The percentage of free ATMs doesn’t vary much between these categories. However, the number of free ATMs per 100,000 population is notably higher in city and large town constituencies than in small town or village constituencies.

By comparing 2018 data with 2017 data, we can also look at how free ATM provision has changed. Small town and village constituencies have lost more free ATMs over this period than city and large/medium town constituencies.

Deprivation

Constituencies in the most deprived parts of England have greater provision of free ATMs – with 94 per 100,000 compared to 61 per 100,000 in the least deprived parts of England. This may partially reflect the city/town division above, since most deprived constituencies are in cities and a larger proportion of the least deprived constituencies are not.

However, this isn’t the full story on deprivation. The most deprived constituencies have a lower percentage of free ATMs than the least deprived – 76% compared with 84%. This means that there are three times as many fee-charging ATMs in the most deprived constituencies compared to the least deprived. This can’t just be explained by the city/village divide – even within cities, the most deprived areas tend to have more fee-charging ATMs.

Carl Baker is a Senior Library Clerk specialising in Social and General Statistics and Tim Edmonds is Head of the Business and Transport Section at the House of Commons Library.

Data sources

LINK constituency ATM data for 2017 and 2018

ONS Population Estimates

Commons Library, City and Town Classification of Constituencies and Local Authorities

Commons Library, Deprivation in English Constituencies