There has been a spike in the number of people who mainly use cash for their daily spending, a new report has found.
The banking body UK Finance, in its annual report on the UK payments market, has stated that there has been a 66 per cent increase in the number of people who prefer to use cash for their everyday spending despite a volume increase in contactless and mobile payments.
The estimated number of “mainly use cash” people has fallen every year for several years and stood at 900,000 in 2022, but it leapt to 1.5 million last year – the highest figure since before the coronavirus pandemic.
UK Finance's head of research Adrian Buckle said, "This is likely to be a reflection of the use of cash to manage a limited budget."
The report adds that nearly three-quarters (72 per cent) of 18 to 24-year-olds regularly used their digital wallets to make contactless payments while just over a quarter (27 per cent) of 45 to 54-year-olds used mobile contactless payments regularly, falling to just 8 per cent of the over 65s.
While the core of people who mainly use cash has increased, so, too, has the number of people who live “largely cashless lives” – defined as either using no notes or coins at all, or using them only about once a month. The number of people in this category nudged up to 22.1 million in 2023.
Cash remains the second most popular payment method, after debit cards - with an estimated three million people still relying on it.
The report comes as the Financial Conduct Authority has published full details of the new powers granted to it by the government to protect access to cash for consumers and small businesses. Under the regime, set in motion by the last government and taking effect on 18 September, banks and building societies will need to weigh up if local communities lack access to cash services such as branches and ATMs, and will have to plug significant gaps.
