The FCA and PSR estimate that 95.4% of the UK population are within 2km of a free cash access point and 99.7% are within 5 km.

The withdrawal of bank branches and free-to-use ATMs on Britain's high streets alongside a mass-market switch to contactless payments has raised concerns that vulnerable consumers who rely on cash are being left behind.

Consumer research conducted by the regulatory bodies finds that there remains a broad spectrum of consumers - typically on low incomes or in ill-health - who contine to rely on easy to access cash.

Sheldon Mills, executive director, consumers and competition at the FCA says "Around 5 million adults say they still rely on cash, and we know that where access is removed, it can affect the most vulnerable in society. This is why we have intervened in the past to provide banks with guidance on what to consider when closing branches."

The FCA has been criticised for its over-generous distance calculations. Research by Hargeaves Lansdown indicates that in rural areas, only 53% have access to cash within 1km, 76.6% are within 2km and 98.2% within 5km.

Sarah Coles, personal finance analyst, Hargreaves Lansdown, comments: “The pandemic has accelerated the ever-decreasing circle of bank branch closures, but the FCA has concluded that this isn’t causing widespread cash deserts, where people have to travel for hours to get their hands on their money. Unfortunately, it’s using a pretty generous definition of what makes cash accessible.

"Even with this generous definition, there some major gaps, including rural areas, where only around three quarters of people are this close to their cash.

"However, given that the 5 million adults who rely on cash include the most vulnerable groups, you have to ask whether 2km really is a reasonable distance to expect them to travel. Could anyone with mobility issues cover a 4km round trip each time they need money - especially if they don’t have transport? When the distance is narrowed down to 1km, the numbers look far less promising, with only around half of people in rural areas this near to their money."

Both the FCA and PSR have issued edicts to banks and national ATM operator Link to ensure fair treatments for customers when branches and ATMs are closed.

The UK is also conducting a number of access to cash pilot programmes, including shared branch models and universal retail cashback services.

The UK Treasury has additionally launched a consultation on establishing geographic requirements for the provision of cash withdrawal and deposit facilities, the designation of firms for meeting these requirements, and establishing further regulatory oversight of cash service provision.

Says Mills: "We expect firms to help protect access to cash and wider banking services in ways that meet consumers’ needs, and we continue to engage with firms closing their branches, to ensure that they treat their customers fairly. We will also review over the coming months how we can strengthen our guidance to help protect reasonable access to cash and banking services.'

She says the FCA and the PSR will continue to work with Government to prepare for legislation, and with industry and other stakeholders on cash access issues. The FCA intends to update on the next steps on its work in Q4 this year.