Digital bank Pockit recently conducted a research that revealed that banks are closing branches in deprived communities in England four times faster than in wealthy areas. High street banks have collectively closed 990 branches in the most deprived areas of the country since 2010, compared with 230 in the richest local authorities. The research said a quarter of the poorest local authorities had lost over 40 per cent of their bank branches, totalling 705 closures, over an eight-year period.
Between 2010 and 2018 about 5,035 bank and building society branches in England closed, a rate of almost two every day. The report said that in Bradford, the 30th poorest local authority, the number of branches has dropped 60 per cent from 190 to 75. At the same time, Windsor and Maidenhead lost 17 per cent. Pockit has claimed that people without access to a bank account face paying up to and £485 each year as they miss out on preferential discounts on utility bills.
Pockit chief executive Virraj Jatania said, "Big banks are marginalising the poorest in society by shutting shop and leaving them behind. These findings suggest that high street lenders prefer serving the most well-off rather than the most in need. Banks should be supporting customers to improve their financial health, not abandon them." Gareth Shaw, head of money content at consumer group Which?, said banks needed to provide suitable alternatives before they shut branches.
He said, "Our research shows that consumers in the two lowest household income groups rely on cash the most, but these people are struggling to access this vital payment method through the double blow of bank branch and cashpoint closures." The Treasury select committee recently called for basic bank accounts to be accessible to all consumers regardless of whether they are eligible for another bank account, and recommended that the Financial Conduct Authority mandate banks to relax their opening restrictions on these accounts.