Cash is back! More of us are using pounds and pennies for purchases amid the cost of living crisis, banking bosses say
- The number of cash transactions rose by around 400,000 to 6.4 billion last year
- Debit card payments made up half the total of payments, rising by 18 per cent
More than half of all payments are being made by debit card for the first time – but banking bosses say it is too soon to write off cash.
Yet despite the switch to cards and mobile phone apps, the number of cash transactions rose by around 400,000 to 6.4 billion last year.
The increase came as more people relied on notes and coins to help them budget amid the cost-of-living crisis, according to the industry body UK Finance.
The total number of payments through any method was 45.7 billion in 2022, which was up from 40.4bn in the year before.
Debit card payments leapt 18 per cent to 23 billion, making them just over half the total for the first time. The 6.4 billion cash payments accounted for 14 per cent of the total.
More people relied on notes and coins to help them budget amid the cost-of-living crisis, according to the industry body UK Finance (Stock Image)
UK Finance, which represents the banking and financial services sector, said the number of people who mainly use cash came down from 2.2m in 2017 to 1.1m in 2021 and fell again to 900,000 in 2022.
The organisation said: ‘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.
‘There were 21.6 million people who used cash only once a month or not at all in 2022, down from 23.1 million the year before.’
Looking ahead, UK Finance said it expects the number of cash payments to fall to around 3.3bn by 2032, accounting for around 8 per cent of all payments.
Adrian Buckle, head of research at UK Finance, said: ‘During 2022 we saw increased use of contactless, online banking and mobile payments, although cost-of-living challenges meant that some people preferred to use cash to help with their budgeting.’
Debit card payments leapt 18 per cent to 23 billion, making them just over half the total for the first time
Graham Mott, director of strategy at LINK, which manages the cash machine network, said: ‘Recently, as people manage higher inflation and bills, there has been evidence some people may be using cash to help them budget.
‘While the report shows cash in long term decline it also shows that people have chosen to use it more overall in the current tough economic climate.’
The deputy editor of Which? Money, Sam Richardson, said: ‘It is right that millions of consumers across the country find paying digitally easy and convenient – yet as UK Finance’s report shows, there remains a significant minority of people who are not yet ready or able to make that switch, evidenced by an increase in cash payments over the last year.
‘Whether it’s to pay for everyday essentials or to keep track of finances amid the worst cost of living crisis in decades, those who still want to use cash should be able to do so – without having to pay just to access their own money.’