Eight million Brits say cash is still a necessity
Despite the rapid increase in the use of cards and electronic payments, eight million Brits – 17% of the population – say cash is an economic necessity, according to the interim findings of the Access to Cash Review.
The review, which is sponsored by LINK, was set-up to establish consumer requirements for cash over the next five to 15 years.
It said the UK needs to “plan ahead, not sleepwalk” into a cashless society.
Going cashless too quickly could threaten rural communities and lead to social isolation, it added.
Other risks include rising levels of debt for those who use cash to budget, financial exploitation, and stigma towards those who rely on cash.
Cash use has halved in the past 10 years and is forecast to halve again in a decade’s time. In 2017, debit cards overtook cash as the most popular payment method for the first time.
Natalie Ceeney, independent chair of the Access to Cash Review, said: “The decline in the use of cash has been dramatic, and with rapid technology development and adoption this trend will continue. But for millions of people in the UK, cash is not a choice, it’s a necessity.
“If we don’t plan carefully for a world of lower cash, in other words, if we sleepwalk into a cashless society, millions of people will be left behind. As cash use continues to fall, we need to safeguard the use of cash for those who need it, and at the same time work hard to ensure that everyone can participate in this digital economy.”
The research shows the UK is split on whether people believe there will be a cashless future in their lifetime.
More than four-in-ten (41%) Brits believe it will happen, compared to 38% who believe it won’t.
However, all consumers acknowledge that as we stand today, there are significant risks to groups and the economy of going cashless, including 74% worrying it would take away people’s right to choose and 72% believing that vulnerable groups of people would be more likely to get scammed or defrauded.
Ben Broadbent, deputy governor for monetary policy at the Bank of England, said: “We believe it is important the public has choice in how they make payments. The UK has seen a decline in the use of cash. However, we also think that cash is likely to remain a very important part of the payments landscape for a long time. It is true that an unmanaged decline in cash use could limit choice for people and businesses who prefer to use cash.”
The review will be publishing its policy recommendations in the New Year to government, regulators and other policy makers on what needs to be done so that no one is left behind.