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Cash is a crucial budgeting tool for 15 million Brits

Paloma Kubiak
Written By:
Paloma Kubiak

Millions of people still rely on using cash to keep track of their spending, but progress to protect banks and free ATMs is slow, according to a campaign group.

Half of all people regularly use cash and 52% of those said it helps them to budget.

This number is set to increase, as more people are expected to start turning to cash as they find their finances squeezed due to the cost-of-living crisis.

But being able to get hold of, and use, cash is becoming harder as bank branches close and free ATMs shut down.

Since 2015, 4,685 bank branches have shut down, and 12,178 free ATMS have closed since 2018, according to Which?

More than half (58%) of the 4,000 people polled by Which? said they would need to start budgeting to deal with the cost-of-living increases. A fifth who don’t usually use cash said they would also start using it to manage their finances.

Low-income households are most likely to use cash instead of debit or credit cards, or contactless payments. Of those asked by the campaign group, 34% with an annual income of less than £20,000 said they found cash easier to budget with compared to 24% of those with an income of between £40,001 and £60,000.

‘Slow progress’ on access to cash

The consumer group is now calling for the government to legislate to protect access to cash in the upcoming Queen’s Speech on May 10.

It said progress has been slow towards proposals to protect cash, such as the idea of shared banking hubs and enhanced Post Offices. At the moment measures are not mandatory and there is nothing to stop banks withdrawing branches or ATMs.

Which? has written to the Treasury, along with other organisations, urging the government to legislate on protecting access to cash.

Jenny Ross, Which? Money editor, said: “Our research shows that cash remains vital for many on a tight budget, and many more people could well turn to it to manage their finances as the cost-of-living crisis continues.

“However, the UK’s cash system has taken a battering as thousands of bank branches and ATMs have closed in recent years, leaving those who rely on cash and face-to-face banking services at risk of being cut adrift.

“That’s why it is crucial that the government finally makes good on its promise to legislate to protect cash in next week’s Queen’s Speech.”

There are also calls to introduce a long-term plan to protect access to cash.

John Howells, CEO of LINK, said: “Cash remains vital for consumers and its importance is highlighted by the cost-of-living crisis, with many more now relying on cash to help them budget and manage their payments. While the UK has excellent cash access at the moment, there needs to be a long-term plan to protect free access to cash as the existing infrastructure is in decline as usage drops away.

“While ATM use will never return to pre-pandemic levels as people become increasingly comfortable using new ways to pay, we’re still seeing £1.5bn withdrawn from cash machines every week, demonstrating how essential access to cash continues to be for millions of consumers.”