HSBC to dispense more £5 notes

It says it will soon have such notes in approximately 10% of its 3,800 ATMs, up from 4%.

This follows Bank of England moves in March to ensure more £5 notes are dispensed, which would help people budget (see the Budget Planner guide).

Cash machine operator Link says all of the UK's big banks and building societies have plans to begin dispensing fivers from ATMs, or increasing the supply of them.

As well as HSBC, Barclays and Lloyds TSB dispense £5 notes at some cashpoints. Earlier this year, ATM operator Bank Machine launched a network of 21 free cash machines that only dispense £5 notes.

Such moves are likely to be popular. Link commissioned a survey last year which showed 74% of consumers would be satisfied or very satisfied if an ATM could dispense £5 notes. The smallest denomination notes most cashpoints dispense are tenners.

Budgeting help

Dan Plant, MoneySavingExpert.com money analyst, says: "This trend is good news as it will help many more budget properly as it means you can take out closer to what you need so you do not overspend."

The main obstacle to a wider roll out is that, £5 notes are more likely to tear, Link says. This means they are more likely to jam the ATM.

HSBC says it may increase the number of machines dispensing £5 notes depending on how the move is received by the public.

In a trial last year, the bank says it witnessed a significant increase in the flow of £5 notes being deposited by local businesses. It says this points to the trial's success, as customers were spending the notes locally, increasing their volume, so businesses no longer felt the need to hoard them for change.

An HSBC spokesman says: "Improving the flow and quality of £5 notes is important. Businesses don't want to be left short and customers prefer newer notes.

"By clearly labelling the £5 dispensing machines and increasing their number to almost four hundred, the vast majority of customers across England and Wales will now have easy access to good quality £5 notes."

Further reading/Key links

Money help: Budget Planner, Money Makeover, Debt Help Top Deals: Best Bank Accounts