The use of cash in the UK is experiencing a revival, as data reveals that payments made using notes and coins went up for the first time in ten years.
UK Finance, a banking trade body, states that inflation fears and a cost of living crisis are steering people back to using physical money to manage their budgets.
“Growing fears about inflation and the rising cost of living have meant some people are making greater use of cash as a way of managing budgets,” said a UK Finance spokesperson.
People seem to appreciate the tangibility of notes and coins in a time of financial strain.
Young and Old Embrace Cash Payments
Among the 16 to 24-year-olds, who are generally seen as tech-savvy, more than 15% of payments last year were made with cash.
Even the older age group showed interest in alternative payment methods. Reports indicate that 8% of people aged 65 and above used “buy now, pay later” options, doubling from 4% in 2021.
Cash and Small Purchases
Cash payments went up by 7% last year to reach 6.4 billion, a statistic that turns heads when many businesses have shifted to card-only models.
This is partly due to people’s shopping habits changing; they now visit supermarkets more often for smaller purchases. These trends suggest that when it comes to day-to-day expenses, many still prefer to count their pennies, literally.
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Vital for Rural and Elderly Populations
The move to digital money often overshadows the groups that continue to depend heavily on cash, such as the elderly and residents of rural areas.
“In places where they are cashless, if there’s no online connection [retailers] can’t take any cards,” said Derek French, a long-term campaigner for access to cash.
This makes cash indispensable for such communities.
Government’s Role in Cash Availability
In August, the UK government announced plans to maintain public access to cash. Banks failing to offer free cash withdrawals will face financial penalties.
This decision acknowledges cash’s ongoing importance in society, particularly in unstable economic conditions.
Buy Now, Pay Later Stagnates
While cash gains traction, other payment methods like ‘Buy Now, Pay Later’ appear to be stalling. About one in eight people in the UK reported using it in 2022, the same ratio as in 2021.
Even among people aged 65 and above, only 8% used this service, albeit doubled from the 4% in 2021. This could mean that when financial certainty is shaky, the familiarity and straightforward nature of cash triumphs.
Cash Forecast Tweaked
The banking body has adjusted its future estimates in light of the current data. Earlier predictions had stated that people would make fewer than 3 billion cash payments by 2031, representing about 6% of all transactions.
Revised estimates for 2032 now expect around 3.3 billion cash payments, making up close to 7% of all payments.
Digital payments still continue to dominate, but there’s something to be said for the tangible quality of cash—something that a significant minority of UK citizens seem to agree with.
The ‘mini-renaissance’ of cash shows it still holds a valuable place in our wallets and lives.
