Chancellor told to protect cash as declining use threatens its future
The new Chancellor Rishi Sunak is being urged to include measures in the next budget to protect the future of cash in the UK as campaigners say the current physical currency system could collapse within a decade.
The use of cash has been consistently falling for the last decade with card use overtaking it (13.2bn annual payments compared to 13.1bn for cash) at the end of 2017.
Since then cash has continued to fall and 13 per cent of free-to-use cashpoints were closed in the last year as they became financially unviable due to declining usage. A quarter of ATMs now charge withdrawal fees.
Current trends suggest that by 2028 cash will account for fewer than one in ten (9 per cent) payments across the UK.
Panel members from last year’s Access to Cash Review say Sunak needs to introduce legislation to protect physical money in the UK.
Around 2.2 million people are still thought to be almost entirely reliant on cash in their daily lives, particularly the elderly, vulnerable and those in rural communities.
According to the Financial Inclusion Commission, nearly two million people in Britain don’t have a bank account, meaning they need notes and coins to pay their way.
Banks should be obliged to provide suitable cash access to their customers, the panel argued.
Natalie Ceeney, independent chairwoman of the Access to Cash Review said: “The UK is fast becoming a cashless society – without knowing what this really means for consumers or for the UK economy. Many people may want a completely digital future, but we need to make sure that this shift doesn’t leave millions behind or put our economy at risk.
“I’m glad that our report of a year ago made the industry and regulators take the issue of cash far more seriously. We welcome the positive initiatives from the banking industry and much needed co-ordination from regulators.
“However, commercial pressures on all businesses mean that we cannot rely on the status quo, and we can see serious strains emerging.
“Regulators currently don’t have the tools that they need to ensure that everyone who needs cash can get it. Now is the time for government to protect cash and allow us to look ahead to how we can prepare for a digital future which includes everyone.”
Which? money editor Jenny Ross said: “The cash network has already been dramatically eroded, and, unless urgent action is taken in the Budget, it’s clear that it will crumble completely.
“Some industry-led initiatives are encouraging, but they cannot stem the tide of bank branch and cash machine closures alone, and without legislation many more communities will be cut off from cash or forced to pay hefty fees to access their own money.”
A spokesman for the Treasury said: “Technology has transformed banking for millions of people, but we know that many still rely on cash.
“That’s why we’ve invested £2bn to ensure everyday banking services are available at 11,500 Post Office branches across the UK.
“We’re also working closely with industry and regulators to ensure everyone who needs cash can access it.”
Tomorrow sees the launch of a new £20 note made of polymer materials that is more resilient and has a 53 per cent lower carbon footprint than the old notes, according to the Bank of England.
Last year then-Chancellor Philip Hammond said that cash isn’t going away anytime soon and rubbished rumours that 1p and 2p coins were going to be scrapped soon.
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