No-one uses cash any more . . . . right?
Well, not quite. According to the Post Office, this August it handled £3.45 billion – the highest total of cash since it began recording volumes five years ago. This is even more surprising as August is a month when people typically use less cash.
And according to Martin Kearsley, banking director of the Post Office, this trend of higher cash usage is set to continue over the next few months: “We expect cash transactions to continue to exceed expectations in October and for the rest of the year”.
But why? Is cash coming back into fashion again?
In this article we take a quick look at:
There are around 2 million people in the UK who depend almost entirely on cash for their daily needs. This includes groups of people who may have less access to digital methods of payment, for example older people, vulnerable people and low-income households.
However, around 34% of the general population also like to use cash some of the time for other reasons, including:
It is far easier to overspend using a card than if you have to pay cash. Using notes and coins is a visible reminder of how much money you are spending, and provides a natural spending limit because once it’s gone it’s gone.
Ironically it can feel safer to depend on cash than cards or online payments. If you are able to pay in cash it is not subject to any kind of technical glitch or the risk of hacking or scamming, even if this does mean sometimes walking around with a large quantity of cash on you.
Despite the current resurgence of cash, in the long term the trend away from cash is likely to continue. According to UK Finance – the body representing the banking industry – cash is likely to account for only 6% of payments by 2031, from its current level of 15%.
There has been a dramatic reduction in cash usage over the last decade, where it accounted for 55% of payments in 2011 as compared with only 15% last year.
But as more and more banks are closing their branches, if you do want to continue using cash for the foreseeable future where can you get it?
Around 90% of cash withdrawals in the UK are currently from ATM machines, but this is gradually declining – particularly in less populated areas. Some people are paid in cash, and cash is also still withdrawn from banks, but many branches are closing.
There are around 11,500 local Post Office branches across the country, which often fill the gaps left by the closure of bank branches. The Post Office is also in the process of setting up shared hubs with banks, which offer a wider range of banking services.
The remainder of cash withdrawals are through cashback from shops. And there is a growing initiative – Cashback Without Purchase – to help with this.
Cashback Without Purchase enables customers in an increasing number of small shops to request cashback without having to make a purchase. As long as you have a UK bank account, you can request to withdraw any amount between 1p and £100 in cash at the till, even if you are not making any other purchase.
Cashback Without Purchase is a flexible way of withdrawing money in that you can ask for any amount you like – it does not have to be a round number. And you can specify the denominations of notes and coins in which you want your cash.
The scheme is supported by financial institutions such as LINK and Barclays. It is available at an increasing number of local stores including pubs, cafes and small independent shops.
So keep your eyes open for Cashback Without Purchase locations near you. You can also find out some of the locations by using the LINK Cash Locator online or downloading the free LINK Cash Locator app from either the Apple or Google Store.
We hope that this article has given you some useful information about the benefits of using cash, and where to get cash when you need it. As we have seen, it can help you to monitor and control your spending, so could be helpful if you are in the process of sorting out your finances. If this is the case and you need some extra funding to get back on track, remember that Munzee offer loans that may be able to help.
Do check back here soon for more financial and lifestyle tips from Munzee Loans.
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