UK's cash system is on the "verge of collapse" amid fears millions could be left struggling

6 March 2019
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The UK’s cash system is on the “verge of collapse”, with ATM and bank branch closures just “the tip of the iceberg”, a new report reveals.

The Access to Cash Review published today warns that Britain’s cash infrastructure is in danger of collapsing.

The independent review, commissioned by ATM provider Link, found that Britain is yet not ready to go cashless.

It says that the UK is at risk of “sleepwalking into a cashless society”, which could leave around eight million adults struggling to cope.

The elderly and disabled could lose their independence, rural communities could be threatened and debt could also increase.

There are fears the country could be a cashless society within the next 15 years if the current declining usage trends continue.

Cash is only used for three in every 10 transactions, down from six in 10 a decade ago and is forecast a fall to as low as one in 10 transactions within the next 15 years.

The report says that this shift away from cash towards digital payments is placing significant strain on the UK’s cash infrastructure, which costs around £5 billion a year to run.

Bank branch and ATM closures are leading to an increasing number of retailers going cashless.

In response, the review is calling on the government, regulators and banks to act now to ensure cash remains viable for as long as people need it.

The report recommends a “guarantee to cash access” is introduced, with businesses providing essential services required to accept cash.

It also suggests a more “efficient, effective and resilient” wholesale cash infrastructure to help ensure that cash remains viable as its use declines.

Natalie Ceeney, independent chair of review, says “sleepwalking into a cashless society could leave millions behind".

She adds: “We need to guarantee people’s right to access cash and ensure that they can still spend it.

“We need leadership of this critical issue from our regulators and government, but success will rely on banks continuing to properly support their customers who rely on cash.”

As the report was released, the Bank of England announced it will work with the industry to develop a new system for wholesale cash distribution that will “support the UK in an environment of declining cash volumes”.

Sarah John, chief cashier at the Bank of England, says: “We are committed to cash. Although its use is declining, many people, including vulnerable groups, still prefer to use cash.

"It is important that everybody has a choice about how they make payments."

The Bank of England says it will convene a meeting of stakeholders to develop a new system for distributing wholesale cash despite declining volumes. 

Nicky Morgan MP, chair of the Treasury Select Committee, says: “The complexity of this issue cannot be overstated, but the simple truth is that leaving the future of cash to be determined by market forces will not work.

“It is now for policymakers to pick up the mantle and bring about the changes required to secure long-term access to cash for those that need it. Tinkering around the edges to preserve the status quo will not work. It’s clear that something more fundamental is needed.”

Comments

In reply to by anonymous_stub (not verified)

Why the push for a cashless society. Is it so that the government can monitor peoples spending habits???. Money laundering etc. A bit like big brother checking up on you. Plus a cashless society encourages people who live on credit to spend more. Paperless money is great if you stay in control. Try a London pub after work on a Friday night and people are spending their months salary in a bar, WHY? because it's easy. With cash if it's not in your pocket you revert back to the past - don't have it - cannot spend it. What is wrong with that. We are being pushed into a credit way of living which in turns leads to distress, breakdowns and only the courts and bailiffs making money. What is wrong with our parents way of living, (if you want/need it then save and pay for it) What's that old saying "never a borrower or lender be" if you cannot afford then wait till you can. Tough practice and true.

In reply to by anonymous_stub (not verified)

I support the idea of a cashless society - it's merely the natural evolution of how we do things. Bartering was replaced by money which will now be replaced by the digital system - why stand in the way of progress?

In reply to by Murray Snudge (not verified)

Why stand in the way of progress? I can give you a good reasons. For cards to work you need 1 bank computer and one computer based card terminal and...... eerr Ah __Electricity at both ends. When, not if, there is another conflict or War in this Country, all an enemy has to do is kill half the power in the Country and the Economy is lost in an afternoon. So the War is lost in the same afternoon. Very dangerous to have only plastic. When the ATM's were not refilled and the Banks closed for 7 weeks in Greece. and Cyprus folks with cash bought 40 Euro's worth of food for 30 Euro's as Shops needed Cash to pay their staff so they turned up for work. Card holders could neither get food or fuel. Most Greeks keep cash at home now. Also the same was true of the Cyprus crisi. Only the Banks had a bail in there and knicked 10% of Depositors money to save the Bank. I understand this was suggested by the German Government. So look out for the next Bank failure.All my money is held in a Building Society. China are building our new power stations. Cash works without a Candle in the daytime . You would need the technical support of the Candle at night though.Also fraudulent copying of Cards. Is this enough for us to keep cash?There have been over 200 Wars Worldwide since the end of WW2 inc 2 Gulf wars Afganistan, Falklands, Korea, Suez crisis We were in all of these.Phil

In reply to by anonymous_stub (not verified)

The Post Office network would be the obvious candidate to deliver this if it hadn't been allowed to degrade to its current state. Perhaps what is left should be preserved as a matter of urgency.

In reply to by anonymous_stub (not verified)

What rubbish! I, and many other people, rely on cash for our business income (only cash or, even more rare, cheques are acceptable to me). I know many other counsellors and psychotherapists work in the same way. So pubs and banks might like the idea of going cashless - but it simply will not happen for decades to come. Please stop these daft scare rumours. Money goes where payers and savers need it to go. Please get real!

In reply to by anonymous_stub (not verified)

'Verge of collapsing?' Slight exaggeration methinks...

In reply to by Kate Meager (not verified)

Agreed! However if you have a few £Billion and you need to launder it - no problem. See 'Private Eye' regularly!

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