Chancellor Rishi Sunak is under pressure to legally enshrine free access to cash in rural areas, after more than a fifth of ATMs closed in one north-east constituency.

A change in the law was first raised in the March 2020 budget but was delayed by the Covid-19 pandemic.

Now, Conservative MP Andrew Bowie is calling for the Chancellor to push this to the top of the agenda at the state opening of parliament on May 10.

His West Aberdeenshire and Kincardine constituency saw 22% of its free-to-use ATMs close between August 2018 and December 2021.

The proposals would introduce new laws to make sure people only need to travel a “reasonable distance” to pay in or take out cash.

The MP has been contacted by hundreds of constituents calling for the legislation to be introduced as part of the government’s next programme.

It comes after the Banchory branch of Virgin Money closed earlier this year – one of 12 closed across Scotland.

All young people leaving care in Wales at the age of 18 are to be offered the chance to take part in a basic income pilot scheme under which they will receive £1,600 a month for up to two years.

The money will be given unconditionally and participants will be able to earn from paid jobs on top of the basic income with ministers hoping it will help give some of the most vulnerable in society a better chance of thriving.

Officials, who investigated basic income schemes from California to Finland before designing the Welsh pilot, will study whether those who take part do better in the long term, financially, physically and emotionally, than young people who do not.

The scheme, set to launch in the summer, is believed to be one of the most generous of its kind in the world and will cost the Welsh government £20m over three years.

Those taking part will be taxed and will not be able to claim all benefits they would be entitled to if they were not given the money after the UK government refused to allow this. Benefits are not a devolved area.

The move was welcomed by UBI Lab Wales, which campaigns on the concept of universal basic income, under which every citizen, regardless of their means, receives regular sums of money for life to cover the basic cost of living.

People living in rural areas are having to travel further to find somewhere to withdraw and deposit cash free of charge, says the City regulator.

Almost every urban resident has access to a bank, building society, post office or ATM within 2km of home, the Financial Conduct Authority (FCA) said.

This drops to three-quarters of the UK rural population, its research found.

While longer distances are expected for rural residents, campaigners fear vulnerable people face difficulties.

In rural areas of the UK, fewer than half (45%) of residents have a bank branch within 5km of their home.

The FCA said it was considering stronger requirements of the sector to ensure five million people who rely on notes and coins are able to have access to it.

Visa has launched an industry-wide ‘access to cash’ scheme with its partner banks to encourage retailers to offer cashback.

The new initiative specifically targets areas in the UK where consumers currently struggle to access cash, such as remote and rural locations. Additionally, it will incentivise shops and businesses to offer cashback to consumers using their Visa debit cards.

Jeni Mundy, Visa Managing Director, UK & Ireland, said: “The popularity of digital payments continues to surge across the UK, however we know that cash still plays a vital part in the lives of many.

“This is why we want to help increase the number of options that people have to gain access to cash, helping to extend financial inclusion by enabling customers to choose how they pay – be that by cash, cards, mobile devices or other means. We also hope our scheme will encourage people in the target areas to visit their local shops at a challenging time for retailers.”

The scheme aims to increase the number of locations where cashback is offered. Cashback has been available in the UK since 1990, however, Visa has seen transaction volume declining in recent years.

Consumers and community groups have made more than 100 requests for free-to-use ATMs in their area, directly from operator Link in the month following the launch of a new fund.

The Community Access to Cash Delivery Fund is taking requests for free-to-use ATMs in places with poor access, and is part of measures aimed at tackling the concern that it is becoming harder for people to take out cash.

The requests so far have come from every corner of the country, with isolated rural communities, deprived urban areas and small towns all getting in touch, Link said.

If an application meets the criteria and there is a suitable location, Link will fund the new ATM directly.

There is £1m in the pot so far, but more money could be released when needed.