Shoppers shun cards for cash to keep a handle on cost
MILLIONS of households plan to shop with cash and shun card payments to survive the cost of living crisis this year.
One in 10 shoppers intends to save money and budget using cash instead of cards or contactless payments on their bank card or smartphone, according to research by ATM network Link.
An estimated 15 million people depend on using cash to keep a handle on spending but have found it harder to use money in shops and restaurants since the pandemic. Accessing cash is also harder because half of Britain’s bank branches and almost a quarter of free-to-use cash machines have closed in the past two years.
Graham Mott, of Link, said the cash machine closures and reluctance by some businesses to accept cash had created a “digital divide” in the population.
He said: “For some, card and digital payments mean they can track all their spending online or on mobile banking.
“Yet, for many, especially those on fixed or lower incomes, there is no better substitute for budgeting to cash. Not everyone has access to cards or digital payments and they know exactly how much money they have when paying in cash for the bus or in the local shop.”
Of more than 2,000 adults surveyed by the company, almost a quarter said they had recently tried to spend coins or notes in a shop but were forced to use a card because the business would not accept cash.
Experts have said that dwindling access to cash has exacerbated the cost of living crisis for many, especially the vulnerable and elderly who have a higher dependence on physical money.
A third of those dependent on cash are aged over 65.
Helen Morrissey, an analyst at investment service Hargreaves Lansdown, said: “Taking out a fixed amount each week encourages you against making those spur of the moment purchases.
“You can physically see the amount of cash in your wallet decrease and are far more likely to think about whether you really want something before handing over your cash and you are therefore likely to spend less.”
But Ms Morrissey warned shoppers “may struggle to make purchases at all” given the rise in cashless retailers. Small business experts have previously blamed the trend on the lack of bank branches on the high street, which they say has made it harder for local retailers to deposit or access notes and coins.
Last month, the Financial Conduct Authority, the City watchdog, was granted powers to ensure communities were not left without ATMS, bank branches or a Post Office from where to withdraw or deposit cash. The changes are part of the Financial Services and Markets Bill, which promises to protect communities hit by bank closures.