Business

Cash is still a necessity for one in six people, survey finds

Around one in six people say cash is still a necessity despite the growth in new ways to pay
Around one in six people say cash is still a necessity despite the growth in new ways to pay Around one in six people say cash is still a necessity despite the growth in new ways to pay

AROUND one in six people say cash is still a necessity despite the growth in new ways to pay, a report has found.

Some 17 per cent of people believe cash is an economic necessity, according to the interim findings of the Access to Cash Review.

The initiative is being funded by ATM network Link, which said the review is independent from it.

Cash use has declined rapidly in recent years, as alternative ways to pay such as contactless payments have seen a rapid growth in popularity.

But some people still rely heavily on using notes and coins and there have been concerns that bank branch and ATM closures could make it harder for people to access physical money.

Three quarters (74 per cent) of people worry that going cashless would take away people's right to choose, while 72 per cent believe that vulnerable groups of people would be more likely to get scammed or defrauded if this happened, the review found.

Chaired by Natalie Ceeney, a former chief executive of the Financial Ombudsman Service, the review warned that if the UK moves too fast towards being "cashless" without including all parts of society, millions of people could be left behind.

Rural communities with poor broadband and mobile connectivity could be particularly at risk by restricted access to cash, as could people juggling tight budgets who use cash to help them stay out of debt, the review said.

The research also found people are quite evenly split on whether there will be a cashless future in their lifetime.

Just over four in 10 (41 per cent) people believe it will happen, compared with 38 per cent who believe it will not.

Ms Ceeney said: "The decline in the use of cash has been dramatic, and with rapid technology development and adoption this trend will continue.

"But for millions of people in the UK, cash is not a choice, it's a necessity.

"If we don't plan carefully for a world of lower cash - in other words, if we sleepwalk into a cashless society - millions of people will be left behind."

So far, the review has gathered evidence from more than 120 organisations from across the leisure, retail, financial, charity and business sectors and has travelled the country taking evidence from people.

An online survey of 2,000 people across the UK was also carried out.

The review will publish its full report and recommendations in early 2019, with suggestions for Government, regulators and others.

Ben Broadbent, deputy governor for monetary policy at the Bank of England, said:

"We believe it is important the public has choice in how they make payments.

"The UK has seen a decline in the use of cash.

"However, we also think that cash is likely to remain a very important part of the payments landscape for a long time.

"It is true that an unmanaged decline in cash use could limit choice for people and businesses who prefer to use cash."

Jenni Allen, managing director of Which? Money, added:

"It is vital that everyone has the option to use cash for as long as they need to - and continuing the unplanned drift towards a cashless society is not an option if we are to protect almost half the population for whom cash is a necessity.

"The Government should urgently give a financial regulator or the Bank of England a duty to protect access to cash and examine the issues driving change in the payments sector, to ensure no-one is left behind as digital payments grow in popularity."