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The future of cash in the UK

The consumer body Which? held its second ‘Cash Summit’ in mid-May, bringing together key figures from the government, regulators and the payment industry to discuss the future of cash.

In March 2020 the Chancellor of the Exchequer announced plans to introduce legislation to protect access to cash.  However only a few weeks later the first national lockdown was announced and cash became less of a government priority.  At the Summit a few weeks ago, a Treasury minister reiterated the government’s commitment to legislation and disclosed that a consultation on legislative proposals will be launched in the summer.  The consultation will cover which organisations, such as banks, ATM providers and the Post Office, should be in scope of legislation, and who should have regulatory oversight. (It is widely anticipated that the FCA will become responsible for this role.)

Which? has also launched a Cash Friendly Pledge, whereby businesses make a public commitment that they accept cash across their stores. The pledge is in response to recent research by the consumer body which showed that a third of people in the UK had tried to pay for something in cash and been refused since the start of the pandemic. Big names like John Lewis, Asda and Aldi have already signed up. 

At the Summit it was also confirmed that an ‘Access to Cash Action Group’ would be formed by the CEO of UK Finance together with the author of the recent Independent Access to Cash review, working with eight major high street banks/banking groups, Age UK and the Post Office. The objective of the group is to develop industry proposals for how access to cash could be protected in the long term, building on the work of the current Community Access to Cash Pilots. These pilots are testing a range of initiatives, like shared banking hubs in Post Offices and financial education services, in eight locations across the UK. 

Research from the FCA apparently shows that five million adults use cash for most of their purchases. Bank of England data shows that 1.2 million adults in the UK don’t have bank accounts. Which?’s own data shows that one in six people have struggled with the shift towards cashless as the result of the pandemic. The view of Which? is that if action is not taken to protect access to cash, then millions of people will suffer. 

Whilst this is true, and whilst it would seem likely that there will always be a role for cash in a society such as Britain’s, surely there is another aspect to the equation: how to make non-cash payment methods more accessible to those who rely on cash so that they can also benefit from its advantages. Not using cash has many advantages, not only from savings for the infrastructure and related costs required to support it, but also to the individual consumer. Many did not realise until the pandemic that they did not actually need to be dependent on cash, especially as the retail environment quickly evolved to support non-cash usage. It may take time but it would also seem worthwhile to put in place the support, encouragement and assistance to enable all consumers to benefit from the advantages of not being dependent on cash.   

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