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By Julian Goldsmith, 18 July 2008 12:53

NEWS

A government initiative that has rolled out 419 non-charging cash machines to low income areas is set to increase deployment by a third by the end of the year.

The initiative run by HM Treasury and the ATM Working Group was set up 18 months ago to offset the increase in charging ATMs and currently enables around 1.3 million UK citizens to avoid paying charges or travelling outside their community to withdraw their own money.

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Economic Secretary to the Treasury Kitty Ussher MP said in a statement: "When people have to pay to get their hands on their own money it excludes them from the financial system. These new cash machines will help individuals on low incomes to access financial services as easily and cheaply as possible."

It is expected that the number of people supported by the initiative will be increased to two million once the extra free ATMs are in place.

The minister praised Link, the operator of the UK cash machine network for its contribution to the initiative in identifying applicable areas for deployment and in clear signs on ATMs that charge warning users they must pay to withdraw cash.

Ussher said: "I am also pleased that the ATM industry had made real steps to improve signs on cash machines so that it is absolutely clear at a glance whether the machine is free or charging."

All cash machine operators in the UK are part of the Link ATM network, comprising about 37,500 free machines that account for 96 per cent of cash withdrawals and 27,000 charging 'holes in the wall'. Banks pay an interchange fee when machines operated by other companies are used to access their accounts.

As part of the initiative to locate free ATMs in low income areas, a premium on what would normally be charged of up to 50 per cent per transaction is paid by banks to cash machine operators when withdrawals are made at sites with low customer use.