2 hours ago
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Cash use has grown for the first time in 10 years as shoppers keep a close eye on their budgets while prices rise, retailers have said.
The British Retail Consortium said 19% of purchases were made with notes and coins last year, echoing a report by banks showing a slight rebound.
The figures come as the financial regulator is set to consult on a plan to help people access cash.
Ministers say banks will be fined if money cannot be withdrawn or deposited.
Under government rules, free withdrawals and deposits will need to be available within one mile for people living in urban areas.
In rural areas, where there are concerns over “cash deserts”, the maximum distance is three miles.
Shoppers’ choices
Cash was used in 19% of transactions last year, according to retailers, up from 15% the previous year. Until 2015, notes and coins were used in more than half of transactions and, while card use now dominated, cash still had its benefits.
The consortium said consumers were budgeting carefully to try to cope with cost of living pressures, and there was also a “natural return” for cash after it slumped during the pandemic.
Its payments policy adviser, Hannah Regan, said: “We are now seeing a return to many of the pre-pandemic trends in payments, including smaller but more frequent purchases, and a slight return of cash payments.
“Unfortunately, what has not changed, is the ever-increasing scale of fees paid by retailers in order to accept card payments.”
In September, banking trade body UK Finance also reported that cash use had risen for the first time in a decade, pointing to the financial impact of rising prices.
But it said it expected cash use to decline over the coming years, once the current financial squeeze had eased.
UK Finance said nearly 22 million people only used cash once a month or not at all last year.
However, about five million people still rely on cash and there has been pressure to ensure access is still available as bank branches and ATMs shut.
Among a string of closures announced last week, was the final bank in Richmond, North Yorkshire – part of Prime Minister Rishi Sunak’s constituency – which will be replaced with a shared banking hub.
The Treasury wants to maintain the current level of coverage of free access to cash, through ATMs or face-to-face services, but says that could be diluted as cash use falls.
The City regulator, the Financial Conduct Authority, will publish a consultation on Thursday on how the government’s policy could be implemented.
Under the new guidance, if a service such as an ATM or branch is withdrawn and a replacement service is needed in the area, then this should be done before the closure takes place.
A voluntary arrangement is currently in place which means every High Street should have free access to cash within 1km.
How can I save money on my food shop?
Look at your cupboards so you know what you have already
Head to the reduced section first to see if it has anything you need
Buy things close to their sell-by-date which will be cheaper and use your freezer
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