You are here: Home - Saving & Banking - News -

UK’s cash system ‘on the verge of collapse’: what can be done?

Written by:
Britain’s cash system is “on the verge of collapse”, according to a major report published today.

The independent Access to Cash Review said ATM and bank closures were “just the tip of the iceberg” and warned against leaving access to cash to market forces.

The review said the government, regulators and banks must act to ensure cash remains viable for as long as people need it.

Cash is only used for three in every 10 transactions, down from six in 10 a decade ago, and is forecast to fall to as low as one in 10 transactions within the next 15 years.

However, the review found digital payments don’t work for everyone: it is estimated that around eight million adults – 17% of the population – would struggle to cope in a cashless society.

But people getting hold of cash isn’t the only problem. There are also concerns about shops being able to accept cash.

The report said the shift away from cash towards digital payments is placing a strain on the UK’s cash infrastructure, which currently costs around £5bn a year to run.

It warned the economics of handling and accepting cash will lead to more retailers going cashless.

Natalie Ceeney, independent chair of the Access to Cash Review, said: “There are worrying signs that our cash system is falling apart. ATM and bank branch closures are just the tip of the iceberg, underneath there is a huge infrastructure which is becoming increasingly unviable as cash use declines.

“If we sleepwalk into a cashless society, millions will be left behind. We need to guarantee people’s right to access cash and ensure that they can still spend it.”

What can be done?

The review said innovation is key to protecting access to cash. It suggests:
– Guaranteeing access to cash for consumers not just via ATMs but by local shops offering cashback.
– Letting small businesses deposit their cash in lockers of ‘smart ATMs’ rather than having to make a weekly trip to their bank branch.
– Creating a more efficient, effective and resilient wholesale cash infrastructure.

Consumer group Which? thinks the UK needs a standalone regulator to deal with the issue.

Gareth Shaw, head of money at Which?, said: “We have been warning for years of the risk of Britain drifting towards a society where millions of people who rely on cash face being cut off – so this review’s recognition that the system is on the brink of collapse should be an urgent wake-up call.

“With our vulnerable digital banking systems currently being hit by more than one IT failure every day, we believe the government should go a step further and appoint a single regulator with a statutory duty to protect access to cash and build a sustainable cash infrastructure for the UK.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

  • Are you planning to make a last-minute investment into your ISA or SIPP during this tax year? Here are five tips to…
  • Forget a delay, more than a third of private investors favour a no-deal Brexit - #Brexit
  • Have you ever tried to save money but unintentionally ended up spending more in the process? Here's how to avoid th…

Read previous post:
auto enrolment
Opt out and miss out on £500k+

Auto-enrolment minimum contribution levels will increase again from April 2019, from 5% to 8%.