Access to Cash Review Interim Report - Cashless Britain risks leaving millions in society behind

Published on 19 Dec 2018

Millions of consumers across the UK face being left behind if we don’t plan properly for an increasingly cashless society. The interim report from the Access to Cash Review, ‘Is Britain ready to go cashless?’, shows despite the increasing use of cards and electronic payments, approximately eight million (17%) of people say cash is an economic necessity.

  • Cash remains a necessity for approximately eight million people (17% of the population).
  • The UK needs to plan ahead, not sleepwalk into a cashless society which leaves millions behind.
  • If we go cashless too quickly, exclusion risks include: threats to rural communities; social isolation; a rise in debt; financial exploitation; and stigma towards those who rely on cash.
  • Cash use in the UK has halved in the past 10 years and is forecast to halve again in a decade’s time. In 15 years, one in every ten payments could be in cash.
  • Access to Cash Review’s first report follows extensive research in the UK and overseas. The review has heard from over 120 organisations and conducted workshops across the UK.

Download the Access to Cash Review Interim report.

In 2017, debit cards overtook cash as the most popular payment method for the first time.  Consequently, cash use has halved in the past 10 years and is forecast to halve again in a decade’s time.

The review also explores the benefits of digital technology and the pace of development, but highlights that not everyone is yet able to participate in a digital society. If the UK moves too fast towards being ‘cashless’ without including all parts of society, millions could be left behind.

Risks to people include:

  • Viability of rural communities: where broadband and mobile connectivity is poor, and where the local cash infrastructure is reducing.
  • Loss of independence: for people who currently rely on cash for informal support.
  • Rising debt levels: for those on tight budgets, using cash helps to stay out of debt.
  • Financial abuse: cash can give independence in a difficult or abusive relationship.
  • Poor paying more: denied access to goods and services which can be bought online or via direct debits, or even given reduced access to the high street as shops and cafes go cashless.

The research shows that the UK is split on whether people believe there will be a cashless future in their lifetime. More than four-in-ten (41%) of Britons believe it will happen, compared to 38% who believe it won’t. However, all consumers acknowledge that as we stand today, there are significant risks to groups and the economy of going cashless, including:

  • 74% worry that it would take away people’s right to choose
  • 72% believe that vulnerable groups of people would be more likely to get scammed or defrauded
  • 67% believe that people on low incomes might struggle to balance their household budget
  • 65% believe that people with mental health issues might find it harder to manage their money
  • 56% believe that rural communities would become less viable.

Natalie Ceeney, Independent Chair of the Access to Cash Review: “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. As cash use continues to fall, we need to safeguard the use of cash for those who need it, and at the same time work hard to ensure that everyone can participate in this digital economy.

Martin Lewis founder of Many, especially the more affluent and technologically savvy, now live mostly cashless lives.  That’s exactly why protecting access to cash is so important. We must learn lessons from the past. Take Directory Enquiries – technological changes saw demand drop, mainstream attention turned away, and prices rocketed – this left elderly and vulnerable who still access it ripped off. Access to cash is a far bigger issue. That’s why we must plan now, to protect those who need it in future.”

Ben Broadbent, Deputy Governor for Monetary Policy, Bank of England: “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.”

The review, chaired by the former Financial Ombudsman, Natalie Ceeney CBE, is assessing consumer requirements for cash over the next five to 15 years. To date, 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 in places including: Shetland, Porthmadog, and Bournemouth to understand the current needs of consumers and groups across the UK. The review also explored the lessons learned from Sweden, where cash use has fallen to just 15% of all transactions.

The review will be publishing its policy recommendations in the New Year, with recommendations to government, regulators and other policy makers on what needs to be done so that no one is left behind.

Download the Access to Cash Review Interim report.