The amount of money deposited at Post Office branches topped £2billion last month for the first time this year as cash usage continued to recover after the coronavirus lockdown.
The 7.7 per cent annual rise in the total amount deposited and a more than 10 per cent jump in the number of trips to pay in cash was largely driven by a 28 per cent rise in personal deposits, with the amount of cash paid in by small businesses in September still lower than last year.
However, the £965million deposited by businesses at the 11,500 Post Office branches was the most paid in since February, before the coronavirus pandemic hit Britain, although at 810,000 the number of trips customers made to pay in money was a fifth lower than last September.
Deposits at the UK’s 11,500 Post Office branches were higher than the same month in 2019 for the first time since February, as cash usage continued to recover after the lockdown
‘It’s encouraging to see the highest amount of money deposited at our branches all year’, Martin Kearsley, director of banking at the Post Office, said.
‘Cash deposits by personal customers recovered quickly after the first UK-wide lockdown and now far exceed what we saw even at the start of the year.’
The amount paid in over the counter at the Post Office by personal customers rose 28 per cent compared to September 2019 to £1.04billion, the first time this year more than £1billion had been paid in in a single month.
He added: ‘We are encouraged to see business deposits now recovering strongly too and continue to support all local businesses with their cash needs.’
Meanwhile the amount withdrawn over the counter by customers of over 30 banks rose 7.1 per cent between August and September to £591million.
Kearsley said cash withdrawals were ‘making a steady recovery’.
Although the gap has narrowed to its lowest level since March, when the amount taken out exceeded withdrawals in the same month in 2019, this was still 2.6 per cent lower than last year.
The Post Office is increasingly relied upon as the ‘last branch in town’ on many high streets for those who still need to pay in or take out cash, with banks having shuttered around 3,500 branches since 2015.
There are fears the coronavirus pandemic could hasten the decline of cash usage in the UK as consumers opt for debit cards and contactless payment methods.
Meanwhile a rise in the use of online banking over lockdown could spur banks to try and shed even more physical branches in a bid to cut costs.
A study from the Financial Conduct Authority and the Payment Systems Regulator found as many as 59,000 people were more than three miles from a source of cash during the height of the national coronavirus lockdown earlier this year due to the closure of bank branches and ATMs, with those in Scotland particularly affected.
Deposits from individuals rose above £1bn for the first time in 2020. The Post Office is increasingly the last branch in town for many communities where banks have shut up shop
Up to 11 per cent of physical bank and Post Office branches and 12 per cent of cash machines were closed during the lockdown.
36 branches of Britain’s biggest bank Lloyds, and 22 belonging to its stablemate Halifax, remained temporarily closed on Tuesday due to the pandemic.
But while most have since reopened, even if they still operate reduced hours, TSB a fortnight ago announced it would close 164 branches by the end of next year, meaning by the end of 2021 it will have shed 46 per cent of the branches it had after it was spun out of Lloyds in 2013.
However the amount paid in by business customers still lagged 2019 levels, even if it has recovered since the height of the lockdown in April
The number of ATM withdrawals fell from 170million in September 2017 to 88million last month – the recovery in cash transactions at the Post Office since April highlights its importance to hundreds of thousands of people and the extent to which they still rely on cash.
It began releasing cash deposit and withdrawal figures at its 11,500 branches in July.
Up to 11% of physical bank and Post Office branches and 12% of cash machines were closed during the height of the coronavirus lockdown, leaving around 59,000 without access to cash
It is set to play a key role in pilots run in nine areas across Britain in the first six months of next year where communities are struggling to access cash, with existing branches being refurbished, restructured and having their opening hours extended and pop-up Post Office branches being set up in local shops to offer basic banking services.
Post Office chief executive Nick Read said: ‘We’ll be monitoring closely what impact the recently introduced lockdown measures have on small businesses’ ability to stay open and deposit their takings at our branches.
‘They will continue to be the place where cash can be quickly and locally deposited helping to give small business owners more time to keep serving their customers.’
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