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Last Updated: Tuesday, 19 June 2007, 10:41 GMT 11:41 UK
More cash machines for the poor
Man at ATM
Most cash machines are still free to use
The banking industry is installing hundreds of new free-to-use cash machines in poor areas of the country.

So far, 127 new ATMs are in place, with a further 344 due to be working by the end of the year.

The installation of the free ATMs has been prompted by the concerns of MPs that some poor people only have access to machines that charge a fee.

The Government claims that the plan will eventually give a million people access to 600 non-charging ATMs.

"Excellent" progress

The rapid spread of cash machines that charge for withdrawals has prompted concerns that some poorer people, who cannot travel far, are effectively forced to use their nearest cash machine which levies a fee, sometimes as much as 3 per withdrawal.

I'm encouraged by this momentum and hope it continues
John McFall, MP

As a result of pressure from MPs, which culminated in the establishment of the Parliamentary ATM working group, the banking industry agreed to oversee the installation of more free ATMs in deprived areas.

With a target of 600 new machines, the government said progress in the past six months had been excellent.

"The free cash machines already in use are enabling over 260,000 residents in low-income areas to access cash more easily," said Ed Balls, Economic Secretary to the Treasury.

"With a further 822,000 standing to benefit from the confirmed free cash machines still to come on stream," he added.

"This is a huge step forward in our campaign for financial inclusion," agreed John McFall, chairman of the Treasury Select Committee and chair of the ATM Working Group.

"I'm encouraged by this momentum and hope it continues," he said.

Charging

The installation of the extra machines is being overseen by the LINK network which runs them.

The cost of running the new ATMs is being partly subsidised by the rest of the banking industry though the transaction fees that banks and building societies are charged when their customers use them.

Of the UK's current total of 61,000 ATMs, about 26,000 charge a fee, typically those in places like shops, pubs and petrol stations.

However those ones account for only about 4% of all withdrawals, with most people preferring to use the non-charging machines in places such as banks, building societies and supermarkets.

The installation of more free-to-use ATMs was welcomed by the consumer organisation Citizens Advice.

"Citizens Advice research in 2006 identified the existence of free ATM 'deserts', poor communities which had little or no access to a free cash machine," said Sue Edwards of Citizens Advice

"We also look forward to hearing more about the improvements providers are making to their signage on fee-charging machines so that people are fully aware if they are going to be charged for a withdrawal," she added.




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