A Treasury Committee report entitled Acceptance of cash called on the Government to improve its monitoring of cash acceptance. It stopped short of calling for an immediate change in the law to mandate businesses to accept cash – but warned that there could come a time when a rule change is necessary.
The committee heard directly from vulnerable groups, including people with learning disabilities, domestic abuse victims and the older generation, that buying essential goods and services can cost more as the number of places where they can spend their cash is reduced.
The committee warned that people who are already at increased risk of poverty will, therefore, face a “poverty premium” if cash is not widely accepted by businesses and other organisations.
The acceptance of physical currency for goods and services in the UK is not currently specified in any legislation. This means firms can choose not to accept cash – with many cafes and shops already adopting this stance.
Evidence submitted during the course of the inquiry set out the challenge when attempting to assess levels of cash acceptance in the UK. For example, data from Link in 2024 found half of respondents had been somewhere that did not accept cash or discouraged cash usage in the previous eight weeks. However, when polled by Savanta, 98% of small businesses said they accepted cash.
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When appearing before the committee Emma Reynolds, Economic Secretary to the Treasury, stated: “We have no plans to regulate businesses, big or small, to compel them to accept cash.”
The report also highlighted the national resilience benefits of maintaining the ability to spend physical cash, particularly in relation to recent bank outages, which led to a surge in cash withdrawals.
‘This needs to be a wake-up call’
Dame Meg Hillier MP, chair of the Treasury Select Committee, said: “The Government is in the dark on how widely cash is being accepted and that is completely unsustainable. We are at risk of a two-tier society, where the most vulnerable bear the brunt and this needs to be a wake-up call.
“Our committee has sought to give a voice to those groups [that] are at severe risk of not being heard by Government policymakers. A sizeable minority depend on being able to use cash and they must not be forgotten by Whitehall.
“As a society, we must avoid sleepwalking into a situation where cash is no longer widely accepted. This is the beginning, not the end, of our scrutiny of this issue. The Government needs to take this seriously.”
Conor D’Arcy, deputy CEO of the Money and Mental Health Policy Institute, said: “For many of us with mental health problems, cash is hugely important in our day-to-day lives. It helps people to budget, stay in control of their spending or to get support from a family member or friend to manage money.
“As we move towards an increasingly digital society, it’s vital that we protect the use and acceptance of cash for those who rely on it, and we welcome the Treasury Select Committee’s call for the Government to prioritise this issue.”
