Proof a cash machine can help boost businesses

Proof cash machines can boost business: A brand new free ATM was installed last month – and local shopkeepers say it’s already boosted trade

  • Thanks to requests from local firms and residents along Bishopthorpe Road, a high street just outside York’s city walls, a new cash machine was installed 
  • Since October 2019, any community where there are at least five shops and no free access to cash within one kilometre can request a free-to-use ATM 
  • Link has had 3,800 requests from members of the public so far, and has installed more than 50 machines 

Thousands of free-to-use cash machines are closing every year, leaving communities up and down the country marooned without access to pound notes. But not on Bishopthorpe Road, a high street just outside York’s city walls. 

Here, thanks to requests from local firms and residents, a brand new free-to-use ATM was installed last month – and shopkeepers say it’s already boosted local trade. 

Catherine Parker-Michelthwaite, 50, works at Frankie & Johnny’s cookshop a few doors down from the ATM. She says: ‘When customers needed cash we used to send them to the Sainsbury’s store down the road to get cashback. 

Lifeline: Rachel Rickard Straus uses the new cash machine at ‘Bishy Road’, where shops include Frankie & Johnny’s (pictured inset)

‘But we’re a little self-sufficient community of independent shops and it wasn’t right directing people to Sainsbury’s for cash where they would then buy things that they might otherwise have bought on the high street. Now we can send them to the free ATM instead – its installation gets a big thumbs-up from us.’ 

Bishopthorpe Road – or Bishy Road as it is commonly known – is a gem of a high street, the likes of which were once at the core of communities all around the country, but have now become increasingly rare. Charlotte the butcher knows by heart which cuts of meat her longstanding customers prefer. Richard the florist supplies fresh blooms to the barber Ryan across the road in exchange for a haircut when he needs one. 

If one shop runs out of change, another will step in with a loan until they can get to the bank. It’s no wonder Bishy Road won the Great British High Street Award in 2015 and is sometimes referred to as the Notting Hill of the North. But until last month, the only access to cash on the high street was an ATM that charged £1.99 per transaction. Businesses worried that customers who preferred cash faced a choice of paying to access their own money, walking nearly a mile to the nearest free-to-use ATM, or having to buy something in Sainsbury’s to get cash back.

A few residents and shopkeepers contacted ATM network Link to request a free-to-use machine. Since October 2019, any community where there are at least five shops and no free access to cash within one kilometre can request a free-to-use ATM. Link has had 3,800 requests from members of the public so far, and has installed more than 50 machines. The new ATMs are a help, but they go against a swelling tide of bank branch and ATM closures nationwide. As many as 8,700 freeto-use ATMs have closed in just two years, according to consumer group Which?, while 40 per cent of bank branches nationwide could close by the end of the year. 

Unless there is urgent action, including legislation to safeguard access to cash, hundreds more communities face being cut off from cash and banking services. 

Ryan Dawson, 30, who runs Q Gentlemen’s Barbers on Bishy Road, knows the benefit of a local free-to-use ATM. He is currently doing a roaring trade snipping off customers’ unruly lockdown locks. 

‘We filled 15 black bin liners with hair in the first week back after lockdown restrictions were lifted,’ he says. ‘Our card machine was down, so I don’t know what we would have done without the ATM next door. Most of our customers prefer to pay with cash anyway.’ 

Across the road, Richard Bothamley, 71, runs the florist Setting the Scene With Flowers. He sets a £4 minimum for card payments because it costs him more when someone pays by card instead of cash.

‘The card machine has cost me around £800 since January – and that doesn’t even include rental costs,’ he says. ‘Cash payments don’t cost me a penny because the flower wholesalers are happy to accept cash payments so I’ve not once had to make one deposit at the bank in the past ten years.’ 

Down the road, Charlotte and Ben Kneafsey don’t mind how their customers pay. The siblings, aged 22 and 19, run M&K Quality Butchers, which their grandparents Phillip and Linda opened with £200 of wedding money in 1970. ‘We don’t even mind if someone is buying two rashers of bacon for 80p and pays by card,’ says Charlotte. ‘Money is money.’ 

She says that almost all of their customers choose to pay by card these days, although in the event of the shop’s wi-fi going down, having a free cash machine across the road will prove invaluable.

Charlotte’s grandfather Phillip, 72, says payments have changed beyond recognition since the shop’s early days. He says: ‘When we started, everything was in shillings and pence and pounds and ounces. Everyone who lived in the area worked at the Terry’s chocolate factory, the Rowntree factory, the railway or the glassworks – and they were paid in cash at the end of the week.’ 

He adds: ‘Some people have been coming to the shop for so long that they still ask for ten bob’s [50p’s] worth of steak or half a crown’s [12.5p’s] worth of bacon.’ 

Steve Holding, 50, owner of the Pig and Pastry cafe, is happy to take all types of payment. ‘Most people pay using their phone, some using a smart watch,’ he says. ‘But we want customers to have the option to pay by cash and we’re glad they’re not now having to pay £1.99 every time they want to get their own money out. The free-to-use cash machine is a wonderful addition to our wonderful high street.’ 

DOES YOUR COMMUNITY NEED A FREE CASH MACHINE? 

Anyone can apply to have a freeto-use ATM installed in their area if one is not available nearby.

Nick Quin, head of financial inclusion at cash machine network Link, says he and his team will always check whether there are other options available before sanctioning the installation of a free-to-use cash machine. 

‘Sometimes, when someone gets in touch, we tell them about a cash machine in their area that they may not know about,’ he says. ‘But in other cases we will look into getting one installed or replacing a paid-for machine with a free-to-use ATM.’ 

One community to benefit recently is Barton in Oxfordshire, where there had previously only been a machine available that charged £1 per transaction. 

Quin says: ‘One person who got in touch was a debt adviser. She was recommending that people use cash to help with their budgeting but they were being thwarted by the £1 fee they paid every time they made a cash withdrawal.’ 

Often, it is only by visiting a place that the Link team can fully understand why a new cash machine is so necessary. 

New Tredegar in the Welsh valleys is a case in point. ‘On a map, it looks like there is a nearby Post Office,’ says Quin. 

‘But when you’re there, you realise that to get to it means going 500 metres up a sheer incline, which is impossible to do by foot. So we arranged for a free-to-use cash machine to be installed.’ 

Apply online for a cash machine via Link.co.uk/consumers/ request-access-to-cash.

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The banks that grow trees as well as your savings

The banks that grow trees as well as your savings: NS&I to launch new ‘green’ account this summer

  • Oxbury Bank’s Forest Saver account funds woodland creation projects 
  • Gatehouse Bank has launched a range of Green Saver fixed-rate bonds and Isas 
  • Triodos Bank lends your money to environmental, cultural and social projects 

Banks are branching out with green savings offers, which promise to plant trees using your investments.

National Savings & Investments (NS&I) will launch an account that helps the planet this summer, but other banks and building societies have been quicker off the mark.

Savers can already make a difference with the new Forest Saver account launched this month by Oxbury Bank.

National Savings & Investments will launch an account that helps the planet this summer, but other banks and building societies have been quicker off the mark

You won’t see any interest on this one-year bond. Instead, 0.7 per cent  goes towards woodland creation projects on farms across Britain, through an organisation called Forest Carbon.

With interest rates at an all-time low, savers can pool together to make a difference at very little cost to themselves. With this account they’d be giving up just £7 interest a year on each £1,000 invested.

The first trees will be planted to make new woodlands in the Scottish Borders, with other farm sites across the UK to follow.

Set up in 2006, Forest Carbon creates new woodlands in the UK on behalf of companies and individuals wanting to offset the effects of their carbon dioxide emissions and improve the local environment. 

The Chester-based Oxbury Bank, launched in January this year, is the first British bank in 100 years to lend money solely to farmers. It has other savings accounts where you can earn interest, such as its one-year fixed-rate bond at 0.53 per cent.

Gatehouse Bank has also launched a range of Green Saver fixed-rate bonds and Isas. For every bond or Isa opened or renewed, the bank will plant a tree in a UK woodland project through Forest Carbon.

Its selection of bonds includes a one-year deal at 0.55 per cent, or 0.65 per cent for two years.

Other providers with a green theme include Triodos Bank and Ecology Building Society.

Triodos lends your money to environmental, cultural and social projects, including renewable energy and organic farming.

It offers an easy access account at 0.15 per cent — a far higher rate than the 0.01 per cent with the major banks — or a one-year fixed-rate bond at 0.4 per cent. It also has Isas and children’s savings accounts, with a Junior Isa at 1.5 per cent.

Ecology Building Society, which is currently experiencing exceptionally high demand for its savings accounts, lends your money to eco-friendly homes and development projects.

It has joined the Net-Zero Banking Alliance (NZBA), launched last week, which unites 43 world banks, including Lloyds, NatWest, Barclays, HSBC and Santander, to fight climate change in the industry.

It pays 0.1 per cent on its easy access account and 0.3 per cent on its easy access Isa and has a monthly regular savings plan at 0.8 per cent.

All accounts are covered by the Financial Services Compensation Scheme, which pays out up to £85,000 per person if the bank or building society runs into trouble.

So far there are scant details on what the NS&I account will look like. It says only that UK savers will have the opportunity to contribute towards projects that will accelerate the transition to a low-carbon economy, create green jobs and support the collective effort to tackle climate change.

The Government-backed bank is looking to raise just £6 billion from savers in its current financial year, which runs until the start of April 2022, down from £35 billion last year.

But any money going into its new green account will not count towards this total.

[email protected]

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Best inflation-beating savings rates: Make your money work harder

The truth is, there’s no such thing as a single rate of inflation. Everyone will have their own because everyone in the country buys different goods and services from different shops and sellers.

The changing price of dog food, for example, is not going to be relevant to someone who does not have a four-legged companion.

Instead, Britain’s national statisticians aim to create a representative basket of goods which is broadly reflective of the nation’s shopping habits.

Keeping an eye on inflation is key to knowing whether or not your savings are being eaten away by inflation

This basket, which is used to calculate what we know as ‘the rate of inflation’, or the Consumer Prices Index, is updated once a year to reflect changing tastes. 

After 2020, for example, hand sanitiser, home workout gear and electric cars were among the 17 items added to the inflation basket.

The CPI, or a version of it, is used by the Bank of England to determine how effective it is at keeping inflation around its target of 2 per cent. 

The Bank uses the rate of inflation to determine whether to raise or lower its base rate, in the hope people will borrow or spend more.

And while the base rate doesn’t quite determine mortgage or savings rates quite as often as it used to, inflation is very important for everyday savers too. 

Inflation busting accounts at a glance

Two-year fixed-rate: Zopa Bank – 0.77% – £1,000+

Fixed-rate Isa: Close Brothers – 0.7% – three-year fixed-rate – £10,000+ 

Correct as of 21 April 2021 

After all, if the rate paid on savings is below the CPI, savers are almost certain to be losing money in ‘real’ terms.

And sadly, this is something that is relatively common. Not only are savings rates at all-time lows, but those being paid them often fail to switch to a better-paying account. Many of Britain’s biggest banks pay just 0.01 per cent interest, or £1 on every £10,000.

Although the current rate of CPI was just 0.7 per cent in March, the most recent reading, that would mean the ‘real’ value of that £10,000 would shrink by £69 after interest and inflation were calculated.

That’s why it’s important to ensure savers are earning the best rate on their cash savings that they can be.

Therefore, each month This is Money will publish figures from the analysts Savings Champion which reveal how many current savings deals beat the latest available inflation reading from the Office for National Statistics.

Coupled with our independent best buy tables, this should give savers all the information they need to find the hardest-working home for their cash. 

Unless rates rise, if inflation returns to the Bank of England’s 2 per cent target then none will beat inflation, but for now price rises remain low due to so much money having been sucked out of the economy as a result of the lockdown.

The Consumer Prices Index measure of inflation rose to 0.7% in the 12 months to March 

In the 12 months to March 2021

In March 2021, the CPI rose by 0.7 per cent, up from 0.4 per cent in the 12 months to February.

‘Rising prices for motor fuels and clothing’ caused the rise, according to the ONS. 

How many savings accounts beat the latest inflation reading? 
Account  Number of inflation-beating deals this month  Number of inflation-beating deals last month
Current accounts 9
Easy-access accounts 3 29
Notice accounts  4 43
0-23 month fixed-rate bonds  4 97
2-year fixed-rate bonds  22  68
3-year fixed-rate bonds  30 59
4-year fixed-rate bonds  10 16
5-year fixed-rate bonds  32  42
7-year fixed-rate bonds  4
Total  115 367
Source: Savings Champion (figures correct as of 21/04/2021) 

This means that there are currently: 

115 available non-Isa savings accounts which will not lose savers money in real terms, according to Savings Champion. 

This is down by more than a third on the 367 which beat February’s inflation reading of 0.4 per cent.

These include six interest-paying current accounts, just three bread and butter easy-access accounts, and just four fixed-rate deals requiring savers to lock their money away for less than two years.

If nothing else, this is indicative of just how low savings rates are at the moment. 

George Nixon, This is Money’s savings reporter, says: Savers may well think that locking their money away for several years might act as a so-called ‘hedge’ against inflation, but with the future outlook on both savings rates and price rises so uncertain, it is best to retain some flexibility at the moment.

There is also not much of a premium for locking money away for longer than a year at the moment either, so those keeping their money in cash might well be best off locking some away for up to 12 months to benefit from a slightly better rate and the certainty, while keeping the rest in the highest-paying easy-access or short-term notice account they can find. 

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Cash savings websites offer huge rates boost

Should you sign up to a cash savings website paying four times the best rates on offer from banks and building societies?

Cash savings websites offer exclusive deals that pay four times the best rates on offer with banks and building societies.

They have become increasingly popular among starved savers battling rock-bottom rates. 

But City watchdogs warned last week that firms are not being clear enough about exactly how these services work – and the risks involved.

Cash savings websites which let savers spread their money around have become popular

The Prudential Regulation Authority and the Financial Conduct Authority have said providers must ensure information on savings platforms is fair, clear and not misleading.

And banks and building societies should make certain that platforms they use to sell their savings accounts are registered to do business in this country. Experts say the warning is to protect savers from falling victim to future scams. 

Cash savings websites work with selected banks and building societies. In February, insurance giant Aviva teamed up with platform Raisin UK to offer a savings service. 

Other well-established providers include Hargreaves Lansdown and Insignis.

The big advantage for savers is that you avoid what can be a laborious task of opening a new account each time you want to move your money to a new provider.

However, savers could find it takes longer than the typical seven days to get their money back, should the bank run into trouble.

When you make a deposit to a platform, the money is held in a ‘hub’ account. It remains there earning no interest until you select a savings account. 

Rates on platforms change depending on how much money the providers want to attract. The big plus for branchless banks is that they can reach more savers.

Any money invested through the platform should be covered by both the savings provider, and the bank that provides the so-called ‘hub’. 

Under the Financial Services Compensation Scheme, you will get back up to £85,000 should a bank go bust.

You get a separate limit per provider. But you must tot up the total amount you have invested in a bank direct and through the platform to ensure you do not go over the limit.

In the 12 months to March, savers added £126 billion to their easy-access accounts.

Yet big banks pay as little as 0.15 per cent on a one-year, fixed-rate bond, or 0.01 per cent on easy-access accounts.

You can earn 0.35 per cent on an easy-access account at Paragon Bank or 0.3 per cent at Coventry BS through Hargreaves Lansdown. There is also an exclusive, top 0.6 per cent one-year fixed-rate bond from Aldermore Bank.

Raisin UK has an exclusive 0.74 per cent two-year bond with Ahlibank, or 0.8 per cent with Sharia-compliant QIB.

All accounts are covered by the FSCS.

In response to the FCA and Bank of England letter last week Kevin Mountford, co-founder of Raisin UK, said: ‘We believe deposit aggregators play an important role in not only providing more options for consumers to access savings products safely and easily but also enabling banks and building societies to diversify their liquidity risk by offering another safe and reliable channel of deposit funding.

‘As a business, we already work to any banking partners due diligence processes and hold a large store of information on hand with regards to our set up and structure, along with our internal policies and procedures. 

‘A large amount of this is passed to our partners as part of the onboarding process to ensure that the partner is comfortable with our setup and governance. 

‘We welcome any regulatory transparency and oversight for deposit aggregation as we believe this would help standardise the industry and provide further protection to consumers along with clear guidelines for firms which operate in this space.’

Want a 1.18% rate on your savings?

Savers used to pre-financial crisis interest rates are likely rolling their eyes at rates which top out at around 0.45 per cent. However, thanks to This is Money, you can get more.

The money management app Chip has a special account which offers 1.25 per cent interest on up to £10,000, plus a £10 sign-up bonus for those who join in April.

After the app’s £16.50 annual fee is taken into account, that works out at an interest rate of 1.18 per cent on £10,000 of savings, a rate nearly three times the best easy-access rate on offer.

We explain the account in full here, but in order to sign up savers either need to be invited or to use a VIP access code, which This is Money has managed to obtain for our readers.*

> Find out more on the This is Money Chip+1 code here

*If This is Money readers use our Chip link then we will receive a small commission payment. Affliliate links such as this and advertising keep This is Money free to read and pay for our campaigning journalism.

Editorial integrity is always of absolute importance to This is Money and no commercial relationships affect the independence of the editorial team.

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More misery for embattled savers with rates at an all-time low

More misery for embattled savers with fewer accounts on offer and rates at an all-time low

Savers ave the choice of just 1,340 accounts while average rates have fallen yet again over the past year

Savers face a sharp drop in the number of accounts on offer and rates are at an all-time low.

There is a choice of just 1,340 accounts today, compared with 1,588 this time last year.

Meanwhile, average rates have fallen yet again over the past 12 months. The average easy-access account now paying 0.16 per cent, against 0.51 per cent a year ago, says Moneyfacts. 

Cash Isas have seen an even larger fall — down from 0.79 per cent to 0.22 per cent.

It is possible to get higher rates. Last week, Kent Reliance offered an easy-access cash Isa at a top rate of 0.45 per cent. 

It followed closely on the heels of Marcus by Goldman Sachs, which launched its first cash Isa at 0.4 per cent.

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