Fiver-only cash machines aim to help spenders budget 30 June 2010
Rebecca Smithers and Poorna Harjani (about the author)

ATM initiative supported by Bank of England will put more £5 notes into circulation - and help customers spend less.

A cash machine operator has become the first in the UK to offer a network of free ATMs which dispense only five-pound notes.

The move, which has the support of the Bank of England, aims to get more fivers into circulation and to help people manage their money more easily by withdrawing smaller amounts.

The introduction by Bank Machine of the network of free-to-use machines follows a pilot of two ATMs in London – near Waterloo station and on Roman Road in the East End – which only dispense £5 notes regardless of how much is withdrawn.

The group said these machines were currently putting around 100,000 £5 notes into circulation each month. The new network comprises 21 machines – all in Martin McColl's shops – ranging from Banchory in Aberdeenshire to Penzance in the south-west.

Ron Delnevo, managing director of Bank Machine, said: "This is about real people on real budgets facing their own spending cuts. Whether you withdraw £50 or £5 at our machines it will all be in £5 notes. There is cast-iron proof that cash – and small denominations in particular – help people to budget, especially during these financially stretching times. With our network of machines, we think Britain is going to get fiver fever."

Steven Jackson of Beatmydebt.com believes the move is a good idea. "If you have to live on a tight budget in a way that many struggling with debts have to do, then it can be extremely useful to withdraw just five pounds cash at a time because it means you will not spend more than you can afford" he said.

"It is almost always the case that it you have cash in your purse or wallet, you will spend it but many times have no idea what you have bought. If it simply is not withdrawn, it can not be spent" Jackson added.

Public demand
Andrew Bailey, chief cashier at the Bank of England, added: "The Bank has several projects underway to meet public demand for more £5 notes.

One of these aims at encouraging the industry to include £5 notes in their ATMs - the front line of cash provision to the public. Bank Machine's launch of a network of £5-only ATMs across the UK is thus a very welcome move."

Bank Machine created the UK's independent ATM market 12 years ago and now has around 3,000 cash machines in a variety of locations including cinemas, garage forecourts and retail outlets – ranging from Selfridges to convenience stores.

A spokeswoman for Citizens Advice said: "People on low incomes might find it useful if they want to take out smaller amounts of money."

Mixed reactions

Some ATM customers withdrawing cash near Waterloo station in London yesterday welcomed the move. Alexandre Piper, 22, an analyst from Norwich, said: "I think it's fantastic, because it's always useful to have lower denomination currency. There's nothing more frustrating than wanting to get some change and going to a cash machine and being give a £20 note."

However others were less enthralled by the idea. Nouria Hameida, 31, an investment banker working in London, said: "Why are banks now acting as our nannies? We are responsible adults who should be able to make our own choices. Banks should be helping to widen options, not limiting them in what kinds of notes we can take out."

Justin Lam, a 24-year-old graduate from Los Angeles currently studying at the London School of Economics, said: "These £5 cash machines seem to be a good idea for a quick wallet top-up on the way to the pub or whatnot, but I could see the whole idea causing a lot of trips to and from the same cash machine if that's the only option nearby."

The 21 free-to-use machines are located in: Manchester, Stroud, Oakham, Oxford, Cardiff, Paddock Wood, St Mellons, Portsmouth, Strathaven, Axminster, Newton Abbot, Banchory, Swaffham, North Walsham, Penzance, Cannock, Crosby, Beaconsfield, Lower Earley, Market Rasen and Fleet.