Government review as Santander, NatWest and Lloyds close branches

The Government says it is increasingly concerned that elderly customers, vulnerable people and those living in rural areas could be left struggling to access essential banking services as more people move online.

Treasury minister Lucy Rigby has now commissioned an independent review into face-to-face banking access amid fears some towns are being “left behind”.

The move comes as several major banks continue shutting branches across Britain at a rapid pace.

According to TotallyMoney chief executive Alastair Douglas, Santander is set to close 44 branches this year, while NatWest plans to shut 32.

He also warned Lloyds Banking Group – including Lloyds Bank, Halifax and Bank of Scotland – is expected to close at least 168 branches over the next two years.

Douglas said: “Banks have a duty of care to support their customers, and even though digital services are becoming increasingly popular, the real concern is for the elderly and vulnerable – many of who rely on both cash and real-life support.”

The independent review will examine the real-world consequences of branch closures, identify which groups are hardest hit and consider whether ministers should intervene with new laws to protect in-person banking services.

It follows the announcement of the new Financial Services and Markets Bill in the King’s Speech, which could hand ministers fresh powers to step in where communities are losing access to banking.

Rigby said banking services remained “a really important part of lives and communities”.

She added: “We are supporting industry’s roll out of banking hubs, but we also need a clear picture of where communities are still losing out.”

The Government is already backing the expansion of so-called banking hubs – shared spaces where customers from multiple banks can access cash and basic face-to-face services.

More than 230 hubs have already opened nationwide, with over 275 announced as part of plans to reach 350 before the end of Parliament.

According to Cash Access UK, which oversees the hubs, 95 per cent of customer needs are met through the service.

But critics argue hubs are not always enough to replace full-service branches – particularly in isolated areas where residents may already struggle with transport links and digital access.

Richard Lloyd, who will chair the review, said it was essential to understand the impact the “big shift to digital services” was having on communities across the UK.

Meanwhile, Douglas urged customers worried about losing their local branch to check alternatives or consider switching banks altogether.

“If you’re worried about your branch closing, then visit your bank’s website – they’ll have details about the closest available branch, or local banking hubs,” he said.

“Now might also be a good time to think about switching to a different provider.”

Douglas also pointed to cash incentives currently being offered by banks to attract new customers.

“Loyalty doesn’t pay, but six banks are offering up to £250 for you to switch, with added bonuses of cashback, 0% overdrafts, and inflation-beating savings accounts,” he added.

“And moving might be easier than you think – with the Current Account Switch Service automatically shifting your regular payments and balance within seven working days.”

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The Government also confirmed plans to make it easier for credit unions to expand, saying the changes would help more people access affordable loans and safe savings services during a time of continued financial pressure.

Industry groups welcomed the review, with the Building Societies Association warning many consumers still rely heavily on local banking services despite the rise of digital banking.

The review is expected to gather evidence from consumers, banks, businesses and local communities before delivering recommendations next year.